Howden, the global insurance brokerage group, has released its fourth annual cybersecurity report, indicating stability after a major market adjustment due to increased ransomware claims in 2020 and 2021. The “Risk, Resilience and Criticality” report points to improved cyber hygiene among insureds in 2023, helping to mitigate the impact of attacks.

“The favourable dynamics continue into 2024, with the cost of cyber insurance continuing to fall despite ongoing attacks, increasing geopolitical instability and the rise of next-generation AI,” said Sarah Nield, Head of UK e-Retail at Howden.

“The market has never seen such a combination of circumstances: a growing threat landscape coupled with a stable insurance market backed by strong risk controls. The foundations for a mature cyber market, with innovation and exposure-led growth at its core, are now in place.”

According to Howden, carriers and brokers have improved price stability, coverage clarity and consistency of terms and conditions in recent years. This progress paves the way for Howden’s projected global premium of $43 billion by 2030, with significant growth expected from expansion outside the U.S. and serving more small and medium-sized businesses.

Currently, the US dominates cyber insurance, accounting for around two-thirds of the global market. However, according to Howden’s research, more than half of premium growth through 2030 is expected to come from non-US territories. In Europe, particularly Germany, France, Italy and Spain, there is potential to increase premiums by around €700 million by matching the penetration levels seen in mature markets.

“Cyber ​​insurance is key to building resilience around the world, and insurers are now in a strong position to make a real difference,” commented Jean Payon de la Tour, Head of International Cyber ​​Security at Howden. “This includes providing more capacity to meet pent-up demand in regions currently experiencing under-penetration, including Europe, Latin America and Asia, regions where Howden is investing heavily.

“The growth potential is huge, especially since most of these countries are coming from very low levels.”

Meanwhile, the small and medium-sized enterprise sector, which accounts for nearly half of GDP in advanced economies, also represents a huge opportunity, according to research by the World Economic Forum. Brokers and insurers are said to be finding better ways to serve this currently underserved population.

“The full potential of cyber insurance can be unlocked by improving access to areas currently underserved by the market,” said Shay Simkin (pictured), global head of cybersecurity at Howden. “Howden is leading this effort by applying unique insights and expertise to deliver pioneering solutions.”

“In addition to the significant investment in our cyber operations, we have launched a platform that enables SMEs to purchase up to $6 million of cyber coverage in four simple steps, with only the name, industry, revenue and website required to generate a quote. Innovation is key to growth, and it requires a new approach to brokerage that is smart, innovative, entrepreneurial, global and brings together the strongest talent in the industry.”

Additionally, enhanced cyber resilience is seen to benefit policyholders as ransomware attacks return to their long-term upward trend. Attack frequency is up 18% this year from 2023 highs. While recovery costs are rising again after a temporary dip in 2022, fewer companies are being forced to pay ransoms, thanks to more effective risk controls.

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