Awareness of cyber risk and its potential impact is growing. Therein lies an opportunity for commercial insurers, according to a recently released Verisk white paper.
Businesses exposed to risk
Any business that relies on digital technology in some phase of its operations is exposed to cyber risk. Healthcare and education are particularly vulnerable, with almost daily revelations of breaches in those sectors.
Despite a growing number of highly publicized cases, many businesses—especially small and midsize businesses— have been slow to recognize or act on the need to insure against data theft, privacy breach, and ransomware or denial-of-service attacks.
But this seems to be changing.
According to Verisk estimates, written premium for commercial cyber liability could reach $6.2 billion by 2020—up from approximately $2.5 billion in 2016—with annual take-up rates growing 20 to 30 percent per year during the next several years. Insurers that can get a clear picture of the market and identify niches with potential for growth can profit from helping to address these risks.
ISO's cyber insurance program
As of March 19, 2018, a cyber insurance program developed by ISO, a Verisk business, is available for use in 42 U.S. states and territories. Developed using predictive analytics applied to more than 32,000 historical cases, the program features an array of coverage options and extensive rating information to help insurers address this growing and diverse market. It includes advisory loss costs using 17 different rating variables—more than three times the number typically used today.
Cyber insurance needs can vary widely by both industry and company size. The ISO program provides coverage solutions for small and midsize businesses—often the most vulnerable to cyberattacks—as well as for large commercial enterprises, government and nonprofit organizations, and financial services and media companies. ISO’s flexible solutions can help insurers protect businesses from cyber risk in a timely, insightful, and operationally efficient manner.