Advisen and PartnerRe released a white paper which presents the results of a comprehensive market survey on trends that are shaping the cyber insurance marketplace. The survey is intended to give insurance providers and brokers additional insight into the trends and growth potential for data breach and privacy cyber insurance products in the US. The free, 13-page paper is sponsored by PartnerRe.
Is demand increasing? By how much? What is driving increasing demand? What industries are driving demand? What are the biggest obstacles to selling cyber insurance? What covers are most valued? What does the future hold?
These are the questions that the survey on Cyber Liability Insurance Market Trends responds to. Views from approximately 500 brokers, insurance carriers, risk managers and insurance buyers show higher demand for cyber insurance in recent months. However, clients’ awareness of their own risks and their unwillingness to spend money on insurance are creating a drag on growth in the sector.
The results provide a fascinating insight into the demand dynamics in the cyber insurance market.
In response to the question, “What are the biggest obstacles to selling this [cyber] coverage?” one answer clearly stood out: “A lack of exposure understanding”. Seventy-three percent of respondents felt that the insured’s lack of understanding of the exposure was the main obstacle. One broker called the sales process, “an uphill battle”, with IT professionals unwilling to accept that their systems could be compromised. Others noted that, “many mid-market clients are still in denial regarding the exposure” or they had “a never-happen-to-me attitude” to the risk. Closely related, a lack of insurance product information and knowledge on behalf of the brokers was another major factor, according to 48 percent of respondents. One broker commented: “I believe agents don’t sell more or approach customers enough because they lack confidence in talking about the coverage and exposures with the client.