The insurance research firm considers the future of the industry, including if a catastrophic attack occurs.
“(A) still immature cyber market is rocked by one or more near-term catastrophe events on a scale not previously seen, denting confidence in available cyber risk models and deterring investors from committing capital to the nascent cyber catastrophe bond market, with three likely consequences:
In the absence of a large and liquid market for tail risk, the overall market lacks the capacity needed to meet demand at affordable prices.
Prices once again rise steeply, but now to a point where self-insurance looks more attractive than insurance to buyers.
Pressure grows for taxpayer financed risk transfer options.”
The next three years will be critical to the long-term growth prospects of the cyber insurance market, according to a scenario-led analysis of the market’s dynamics released today by Conning entitled “Cyber Risk: On the Edge of Insurability.”
Source: Conning: Fork in the Road for Cyber Insurance Market?