Security supplement: The cost of cover

Cyber insurance has become a complex cost loop for companies wanting to protect against cyber-attacks as premiums increase in price and requirements triple in complexity.

08 December 2023

Yotasha Thaver, IDC MEA.

Premiums for cyber insurance were a mere $600 000 in 2010. By 2021, these totalled $10 billion, reaching more than $12 billion by 2022, with an anticipated increase to $50 billion by 2030 thanks to the radical increase in cyber-attacks over the past year. According to S&P Global, the cyber insurance sector is one of the fastest growing, with anticipated premium growth of up to 30%, reaching $23 billion by 2025. It’s a market showing signs of moving towards maturity as premiums and packages adapt to meet the shifting sands of a complex landscape. It is also, warned the World Economic Forum as far back as 2020, an industry sitting on the edge of potential disaster. It pointed out that it would only take “four insured losses of $300 million to wipe out an entire year’s premium” and that this could set many insurers back by decades.

The cyber insurance sector has clearly been paying attention – premiums have become more expensive and the long lists of terms and conditions increasingly onerous. “I’ve noticed a significant rise in premiums over the last three years – they’ve almost quadrupled,” says Avsharn Bachoo, director: group chief technology at AfroCentric Group. “I see the merit of the insurance itself, but the premiums are becoming unaffordable and I think this is likely to remain a trend due to the complexity of the market and the pace of change.”

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