Number of Marsh’s US clients buying cyber cover doublesPosted On: Apr. 11, 2019 12:46 PM CST
The number of Marsh’s U.S. clients who purchase cyber insurance has doubled between 2014 and 2018, and has increased by seven percentage points over last year’s level, with more firms outside the hospitality and gaming industries buying the coverage, says a report issued by Marsh LLC on Thursday.
A total of 38% of the brokerage’s clients bought cyber insurance in 2018, compared to 31% in 2017 and 19% in 2014, according to the report More Cyber Insurance Buyers as Awareness Grows.
Hospitality and gaming firms’ purchase rates have increased more than any other industry sector over the last three years, according to the report, as recent events have demonstrated the significant amount of personally identifiable information they hold makes them attractive targets for cyberattacks.
Two trends, though, have driven up cyber purchase rates among “nontraditional” industries as well, says the report. One is losses are increasingly expected to be covered under cyber policies rather than property or casualty policies. The other is the disruptions caused by the 2017 WannaCry and NotPetya malware attacks.
“Those attacks coupled with the more recent, high-profile ransomware incidents, have made clear that cyber threats have evolved from data breach and theft to now include business interruption and supply chain disruption,” says the report.
Larger companies are purchasing higher cyber insurance limits, says the report. In 2018, the average cyber policy limits purchased by firms with more than $1 billion in annual revenue increased by more than 25%, to $62.4 million in 2018 from $49.7 million in 2017.
Average cyber limits for all companies increased 11% to $20.9 million in 2018 from $18.8 million in 2017.
Despite the increase in demand, pricing remains competitive because of a commensurate increase in supply, with average cyber insurance coverage pricing dropping by 0.6% in 2018, according to the report, which predicts the market should remain stable for the rest of the year barring a market-changing event.