Ride the Lightning

Cyberinsurance Premiums Expected to Go Up 20-30% Each Year

September 8, 2020

Not good news, but not particularly surprising. Business Insurance reported on September 4 that cyberinsurance premiums, now about $5 billion annually, will increase 20% to 30% per year on average in the near future, according to a report from Standard & Poor's Corp.

Small and mid-sized companies, which have a largely untapped demand for cyberinsurance, are expected to fuel the rise in premiums.

"Cyber insurance growth rates for SMEs (in the U.S.) were more than double those for other industry segments in 2018 and 2019," the report says. "In our view, this is an important development that will gradually improve the risk diversification of insurers' exposure."

Again, no surprise in this quote from the report: "Furthermore, calculating appropriate price for cyber insurance is more difficult than other lines of business, given the dynamic nature of cyber risk and increasing sophistication of cybercrime."

The report quite correctly notes that there is a lack of transparency and rigidity from the insurance market, which is not meeting consumer demands. The report particularly cites "uncertainties around coverage elements, given non-uniform definition of cyber risk and inconsistent terms and conditions, since cyber is often bundled in liability or property lines of business."

Sharon D. Nelson, Esq., President, Sensei Enterprises, Inc.
3975 University Drive, Suite 225|Fairfax, VA 22030
Email: Phone: 703-359-0700
Digital Forensics/Cybersecurity/Information Technology
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