June 11, 2018 by Jason Contant
Standalone cyber insurance premiums in Canada are expected to be worth about $68 million in 2020, an increase at a compound annual growth rate of 15.8% relative to the 2016 estimate, Finaccord said Monday.
Alan Leach, director of the London, England-based international financial services market research and consulting company, told Canadian Underwriter that “this refers just to standalone cyber cover and there will be a higher (hard-to-quantify) value bundled into other liability policies.” Leach added that it is not easy to say which industry sector and type of cyber insurance is expected to see the largest growth.
Globally, cyber insurance premiums are set to outpace all others, according to a press release late last week from Aon plc’s data, analytics, engagement and consulting team, Aon Inpoint. Over the past five years, cyber premiums saw the most significant growth at 23% annually. By 2020, Aon predicts that worldwide premiums will be worth US$4 billion – a compound annual growth rate of 14.1%.
“As we look ahead, we are seeing a broad shift of companies putting a greater value on intangible assets, such as cyber and intellectual property,” said Michael Moran, CEO of Aon Inpoint. “There are multiple reasons for the increased focused and increased premiums, ranging from financial statement protection due to a business interruption to the constantly evolving global regulatory environment, including the European Union’s General Data Protection Regulation.”
Across all types of commercial P&C insurance purchased, the manufacturing segment generated the highest premiums worldwide in 2017, worth approximately US$111 billion. Following manufacturing came agriculture, fishing and forestry at US$72 billion, boosted by the huge value of this segment in China and the United States.
While the manufacturing market will remain strong, premiums bought by financial institutions, the mining and minerals sector, and technology and media firms are expected to increase most rapidly through to 2020 with an annual growth rate of about 6% in each case.
Global commercial P&C premiums were worth approximately US$730 billion in 2017, and are expected to rise to almost US$900 billion by 2020. Among the larger product categories, premiums for commercial auto worldwide grew the fastest from 2013-2017, reaching US$192 billion last year.