The cyber insurance market is a seemingly unstoppable juggernaut. With more than half of US businesses now carrying some form of cyber coverage and the market itself expected to triple in size to $7.5 billion by 2020, it seems the product is just about selling itself.
Yet take-up rates for cyber insurance are not spread equally. According to a recent report from
Marsh Risk Management Research, while all major industries increased their purchase of coverage in 2014, five markets still trail significantly behind – and thus represent the greatest opportunities for independent agents.
By far, the industry most uninsured against cyber risk is manufacturing. Just 8% of companies in this sector purchased standalone cyber insurance last year, up from 6% in 2013. This is not out of a lack of awareness – cyber risk tops the list of concerns for manufacturers, according to the 2015
Travelers Business Risk Index.
Finding the right coverage for the sector can be tricky, however. Data privacy is not so much a concern as property damage resulting from a cyber attack. While cyber policies that cover this type of risk do exist, there is no one-size-fits all approach for the manufacturing industry and agents must be diligent on checking terms of coverage.
The communications, media and technology industry is the second-most uninsured sector against cyber risk. Just 12% of companies bought a policy in 2014, barely shifting from the previous year’s take-up rate of 11%.
Surprisingly, the retail/wholesale market is also largely uninsured, with only 18% of companies carrying coverage in 2014. This industry is one especially vulnerable to cyber attacks, thanks to the large quantity of customer credit card information it collects. High profile hacks such as those against Target and Home Depot have driven up the retail sector’s risk profile and even made it difficult to secure appropriately high policy limits.
Rounding out the top five most uninsured industries are power/utilities and financial institutes, which both have a 21% take-up rate among companies – up from 14% and 17% respectively.
On the opposite end of the spectrum, healthcare – with a 50% take-up rate – education (32%) and hospitality/gaming (26%) are the sectors most insured against cyber risk, according to the Marsh report.
Speaking on the results, Insurance Information Institute President Robert Hartwig noted that while the insurance industry has a way to go with increasing take-up rates to desirable levels, there is reason to be optimistic.
“Every industry is increasing their take-up rate by a substantial percentage. The numbers are low, but we expect them to increase rapidly,” he said. “This is one of the bold new frontiers for insurers.”
