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Due to a lack of actuarial data in the cyber realm, insurers have been cautious in entering the cyber insurance field. However, International Data Corporation (IDC) advises mature insurers to consider offering cyber insurance. To this day, cybercrimes have cost the global economy $445 billion and as a result, IDC describes cyber insurance as an “excellent opportunity for insurers.” In a new report, IDC predicts the industry will see “double-digit growth year-on-year from $2 billion in premiums worldwide today to potentially more than $20 billion in the next 10 years.” While the healthcare and financial industries are more vulnerable to cybercrime, many recent events demonstrate that no organization is fully secure from cyber-attacks and data breaches.

The report explains that as the insurance industry develops real-time monitoring of risk exposure and actuarial data to better understand cyber risks, the cost of cyber insurance will represent the policy more accurately. “Effective data handling is key to the future of cyber insurance offering[s]. Insurers’ data systems should also be integrated into public databases […] to effectively manage and understand potential cyber threats.”  However, it is crucial to understand that cyber insurance cannot be a replacement for good cybersecurity practices and a company’s risk-management strategy.

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