Those fighting cybercrime and those who insure against it must perpetually race to keep up with the new tech, strategies, methods and goals thrown at them by nefarious actors working from all over the world.
After significant compound rate increases in 2021 and 2022, the cyber insurance market stabilized in 2023, with some areas experiencing slight softening as the market continued to adjust throughout 2024, according to Guy Carpenter’s new report, “Behind the Firewall: 2024 Global Cyber Industry Insights.”
The global cyber market is estimated to be worth $16.6 billion in 2024, with North America accounting for $10.5 billion, Europe for $3.9 billion, the Asia-Pacific region for $1.7 billion and the rest of the world for $0.5 billion. Growth is driven by under-penetrated industries, developing regions, and new product offerings along with increased awareness of cyber risks and a growing reliance on technology.
North America leads in premium share and dominates in IT sector premiums, as the U.S. is home to nearly 70% of the world’s largest IT firms. The recent slower growth of premiums in the U.S. is a sign of market maturity rather than a lack of interest. In general, most coverages are offered across policies with limited restrictions on items like contingent business interruption (CBI) and ransomware.
While growth in North America is slowing, Europe and the Asia-Pacific (APAC) regions are heating up. Rapid growth in these areas benefits global reinsurers by diversifying risk and unlocking capacity in new markets. Insurtechs and SME-focused carriers that have found success in the U.S. are expanding to capitalize on this growth.
However, growth in these regions could contribute to aggregated losses with a wide range of potential modeled outcomes. For 2024, the modeled global aggregation loss potential is estimated to range from $20 billion to $46 billion at a 1-in-200-year return period, suggesting a market loss ratio between 120% and 277%.
