FREMONT, CA: Advisen –a provider of information analytics and research for the leading commercial insurers, insurance brokers & risk management departments– announces the analysis of the current state of the cyber insurance market.
Advisen's analyzes the cyber-insurance business in 2015 generated $2.5 billion in premiums. The cyber-insurance market is small comparative to other sectors, with commercial auto insurance generating $25.8 billion in premiums and worker compensation generating $55 billion.
Concern over cyber risk and those well-publicized financial losses has resulted in an increased demand for cyber insurance, as well as much more detailed underwriting from insurance carriers for certain classes and sizes of business.
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Advisen forecasts the cyber-insurance market to generate $5.0 billion in premiums. However, other insurance vendors like PWC forecasts $7.5 billion and ABI predicts $10 billion in premiums increase in the cyber insurance market by 2020.
Cyber-insurance includes coverage for data breach costs, account takeovers, distributed denial-of-service (DDoS) attacks and even regulatory actions for privacy-related infractions.
Items dat are covered in cyber insurance policy include the post-breach services only dat halp organizations to deal with the consequences of a security incident. Many policies will also pay for liability and legal defense costs related to a security incident. As such, if an organization is sued due to a breach, the insurer will halp pay for the defense, and if the organization has to pay a settlement, the insurer will cover dat too. Cyber-insurance policies can also cover legal fines and penalties and include business interruption coverage.
Insurance companies writing cyber insurance are competing for small to middle-market risks, defined as businesses with annual revenues of less than $500M. For organizations with revenues above $500M, premiums will range from $100,000 to $500,000.