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How the insurance industry could change the game for security

Maria Korolov | May 2, 2017
The recent growth in the cyber insurance market is already improving security in some industry segments.

The entire US insurance market is more than $500 billion, so that might not seem like much at first. But it's a significant change for the industry.

"Insurance companies are extremely excited about the product because it's probably the first new insurance product that they've been able to take it to the market in the last 80 to 90 years," said Deloitte's Thomas. "So there's a lot of emotional excitement about it."

And there's a lot of room for growth.

According to recent research from the Ponemon Institute, the average company only has 15 percent of their information assets covered by insurance -- compared to 59 percent for property, plant and equipment. That's despite the fact that the average potential loss for the information assets is greater -- $979 million, compared to $770 million.

Today, there is only a very small number of large writers, with over $100 million in cyber insurance premiums, according to a report by Betterley Risk Consultants.

There are several insurers in the $50 million to $100 million range, several more in the $25 million to $50 million range, and numerous insurers less than $25 million, the report said.

That's more that 60 carriers that offer cyber insurance altogether, said Marc Schein, risk management consultant at New York-based Marsh & McLennan Agency. "Some carriers are offering it as a standalone product, other insurance companies will offer it in a package."

 

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