The total commercial cyber liability market will reach $6.2 billion in written premium by 2020, Verisk predicts in a market analysis titled, Sizing the Standalone Commercial Cyber Insurance Market.
Standalone commercial cyber liability in 2016, excluding package policies, amounted to almost $1.5 billion of written premium as estimated by Verisk, using ISO MarketStance – Commercial Insight. The total, including package policies, was an estimated $2.5 billion. ISO MarketStance solutions projects that, assuming Verisk’s forecasted average annual growth in take-up rates of 20-30 percent, the standalone cyber market could reach $4.1 billion by 2020, with a total forecasted cyber market of $6.2 billion.
“Cyber liability risk is rapidly permeating every business that has any dependence on digital technology, which means very few enterprises are exempt,” Maroun Mourad, president of commercial lines at Verisk’s ISO business, said in prepared remarks.
“Gains in small and midsized accounts will be an increasing factor as the market matures and cyber coverage becomes a contractual requirement in growing numbers of business-to-business relationships,” according to the report. By sector, healthcare and education remain especially important.
Prashant Pai, vice president of cyber offerings at Verisk, added that rapid growth in commercial cyber liability comes as cyber attacks rapidly evolve and change, leaving certain industries more likely to buy cyber insurance.
Verisk projects that the standalone commercial cyber liability market will break down the following way in 2020:
- Small commercial (less than $10 million in revenue): $260 million in direct written premium. Companies in this market sector will grow from 96,800 in 2016 to 242,000 in 2020.
- Middle markets ($10 million-$250 million in revenue): $2.46 billion in direct written premium. The prediction is companies in this market segment will surpass 83,300 versus 43,200 in 2016.
- National accounts ($250 million or higher in revenue): $1.43 billion in direct written premium. There will be 9,400 companies in this segment in 2020 compared to 6,000 in 2016.
Market projections are from ISO MarketStance – Commercial Insight.
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