Howden, the global insurance intermediary group, has released its fourth annual cyber report, pointing to a stabilisation following a significant market adjustment due to increased ransomware claims in 2020 and 2021. The “Risk, Resilience, and Relevance” report cites improved cyber hygiene among insureds in 2023, which helped mitigate the impact of attacks.
“Favourable dynamics have persisted into 2024, with the cost of cyber insurance continuing to fall despite ongoing attacks, heightened geopolitical instability, and the proliferation of Gen AI (artificial intelligence),” said Sarah Neild, head of cyber retail, UK, Howden.
“At no other point has the market experienced the current mix of conditions: a heightened threat landscape combined with a stable insurance market underpinned by robust risk controls. The foundations for a mature cyber market, with innovation and exposure-led growth at its core, are now in place.”
According to Howden, carriers and brokers have improved price stability, coverage clarity, and consistency of terms and conditions in recent years. This progress sets the stage for Howden’s projected global premium of US$43 billion by 2030, with significant growth expected from expanding beyond the US and serving more SMEs.
Currently, the US dominates cyber insurance, accounting for about two-thirds of the global market. However, based on Howden’s research, more than half of premium growth up to 2030 is anticipated from non-US territories. In Europe, especially in Germany, France, Italy, and Spain, there’s potential for a premium increase of about €700 million by matching penetration levels seen in mature markets.
“Cyber insurance is key to strengthening resilience around the world, and insurers are now in a strong position to bring about real change,” commented Jean Bayon de La Tour, Howden’s international cyber head. “This involves providing more capacity to meet pent-up demand in currently underpenetrated regions, including Europe, Latin America, and Asia, areas where Howden is investing strongly.
“The potential for growth is huge, particularly as most of these countries are coming off such a low base.”
Meanwhile the SME sector, which makes up nearly half of gross domestic product in advanced economies, also presents a significant opportunity, according to World Economic Forum research. Brokers and insurers are said to be finding better ways to serve this currently underserved demographic.
Shay Simkin (pictured), global head of cyber at Howden, stated: “The full potential of cyber insurance can be unlocked by improving access to areas currently underserved by the market. Howden is spearheading these efforts by applying differentiated insights and expertise to deliver pioneering solutions.
“Alongside major investment across our cyber operations, we have launched a platform that enables SMEs to buy up to US$6 million of cyber cover in four simple steps, with just name, industry, revenue, and website required to produce a quote. Innovation is key to growth, requiring a new approach to broking that is cycle-savvy, innovative, entrepreneurial, global, and home to the sector’s strongest talent.”
Additionally, it was noted that enhanced cyber resilience is benefitting policyholders as ransomware attacks return to their long-term upward trend. Attack frequency is up 18% this year compared to the elevated levels of 2023. While recovery costs are rising again after a temporary decline in 2022, fewer companies are being forced to pay ransoms, thanks to more effective risk controls.
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