You needn’t go far to find market projections of dramatic growth for the cyber insurance industry, such as this recent estimate of 22.60%CAGR from 2022 to 2030. Not so fast (pun intended) says Swiss Re in its new report “Reality Check on the Future of the Cyber Insurance Market,” which predicts growth of “just” 8% from 2024 to 2025.
So what’s up? “In 2022 the cyber insurance market hit a tipping point. Strong rates and improved profitability prospects of cyber portfolios increased the appetite of incumbent market participants and attracted a series of new entrants into the cyber insurance market,” says the Swiss Re Institute. “Increased competition – initially on excess layers and later primary business as well – reversed the rate and exposure cycle in 2023. And rate reductions counter-balanced a lot of the organic growth.”
The company estimates that some 80% of corporations with revenue > $10 billion have now purchased cyber liability insurance, reducing their spending increases to purchases such as higher coverage limits.
But not to worry, says Swiss Re. Only 10% of SMEs (companies with < $100 million revenue) have bought cyber insurance. “(T)here is a huge cyber protection gap for small and medium sized companies,” says the report. “The SME segment offers a major growth opportunity for cyber insurance globally.”
Check out the report for other interesting observations, including penetration of cyber insurance in various geographic markets.
