Page 28 - RMAI Bulletin July - September 2021

RMAI BULLETIN JULY TO SEPTEMBER 2021

Global Cyber Insurance Hub: as it has come - hasn't been tested by a major loss
event. And the lack of cyber insurance penetration
The cyber insurance has been identified as one of the
next significant markets of growth for London, the would blunt the effectiveness of such a scenario. The
yearly economic cost of Cyber crime already exceeded
capital city of UK. A recent report from the City of
London Corporation in association with Accenture $700billion, but cyber insurance premiums are about
highlighted London's globally unique position as both $5billion.
a hub for commercial insurance as well as the centre
of a thriving and comprehensive ecosystem of cyber At a Disastrous Stage:
security service providers. "No other city has London's Cyber insurance may still be in its infancy, but over the
concentration of (re)insurers and brokers, co-located past few years, we have seen rapid growth followed
with some of the world's leading cyber security service by what we all hope to be a temporary plateau.
providers spanning across InsurTech start-ups, large Insurers are issuing more policies. The amounts of
cyber technology vendors and specialist cyber law protection are increasing. In fact, our community has
practice. London is said to be well-placed to meet the finally seen the first cyber insurance programme to
growing demand for cyber insurance and remain the exceed $1 billion. Meanwhile, the breadth of coverage
pre-eminent global hub. continues to expand. Cyber insurance is maturing and
businesses are adapting to the new and emerging
The city is expected to serve globally as a hub for cyber security threat. Losses from incidents such as
writing cyber insurance and offering associated distributed denial of service (DDoS) attacks or phishing
protection services as well as play a pivotal role in the and ransomware campaigns account for a significant
cyber protection of UK post pandemic landscape. majority of the value of cyber claims today,
Cyber Insurance global market is expected to grow at unfortunately, cyber attacks have become more
a CAGR of 27% from 4.2 Bn to 22.8 Bn from 2017 to frequent and severe.
2024. In India, it's at a nascent stage with 350 policies
sold till 2018 but with a high adoption rate of 40% Y- We've seen ransomware perpetrators become
o-Y growth from 2017 to 2018. IT/ITES and Banking & emboldened, with ransoms swelling from five- and six-
Financial Services are early adopters with newer figure price tags to a reported $10 million earlier this
demands from manufacturing, pharma, retail, year. Hiscox Re reports insured cyber losses of $1.8
hospitality, R&D and IP-based organizations. billion in 2019, up by 50% year over year. Aggregate
losses of that amount against
estimated premiums of more
than $5 billion is certainly
not cause for alarm, even
with the 50% growth in
claims. Caution, perhaps.
Despite the rapid growth,
original insureds often don't
have enough cyber insurance
- if any at all. The "big guys"
- insured firms with
protection of at least $200
million - account for about
20% of what is believed to
be $5.5 billion in global cyber
The pandemic has driven a marked acceleration in insurance premium, according to internal research
businesses adopting digital and cloud technologies. In conducted by PCS Global Cyber.
the global re/insurance industry, it's no secret that the
cyber insurance market has run into some structural How to Prevent Cyber-attacks?
issues. The entire pricing exercise - although Today, hacking is a full-time job and an organized crime
sophisticated and effective in getting the market as far in the cyber world. Cybercrime is not something that

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