The expansion of the cyber insurance market is being hindered by exposure limits and challenges in risk assessment, industry experts say. According to GlobalData, insurers are exercising caution amid concerns over managing claims and a lack of historical data, making it difficult to accurately assess risk.
Insiders point to risk assessment as the primary obstacle in offering cyber insurance. Another significant concern is the challenge of limiting exposure, as a single cyberattack can potentially affect multiple policyholders at once.
Ben Carey-Evans, Senior Insurance Analyst at GlobalData, highlighted that unlike traditional insurance lines, cyber insurance doesn’t allow insurers to narrow coverage to high-risk areas, further complicating the risk management process.
“This creates a delicate balance between driving product growth and increasing penetration while keeping premiums competitive enough to attract customers, all in the face of rising risk levels,” Carey-Evans explained.
While insurers are expected to gather more historical data over time, Carey-Evans noted that cyber risks will only increase as cyber threats become more sophisticated. To address these challenges, he emphasized the need for insurers to prove the value of cyber coverage to businesses and create customized policies to better meet their specific needs.
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