Expert: Cyber insurance will generate $5B in premiums by 2020
The cyber-insurance market is growing fast and generated $2.5 billion in premiums in 2015, said the co-founder of Advisen, a company that analyzes the insurance industry, according to eWEEK.
Speaking at Interop Wednesday, David Bradford predicted the cyber insurance market will generate $5 billion in premiums by 2020.
There are about 60 companies that write cyber insurance policies today.
Though its growing quickly, cyber insurance still pales in comparison to commercial auto insurance ($25.8 billion in premiums a year) and worker compensation ($55 billion in premiums per year).
The cyber insurance market still has some maturing to do too, said Bradford. Because cyber insurance is a comparatively new insurance product, insurers are still working to determine best practices, including how to price policies appropriately. And companies need to understand that cyber insurance cannot not be considered a silver bullet.
"When it comes down to it, cyber insurance is not a substitute for information security," Bradford said. "But it can be a backstop for when things go wrong."
Other companies have been even more optimistic about the future of cyber insurance. PWC recently predicated $7.5 billion in premiums in 2020. According to David Burg, global and U.S. cybersecurity leader at PwC, cybersecurity insurance is one of the fastest-growing sectors in the insurance industry.