The number of customers purchasing cyber insurance from Marsh US increased 33 percent in 2012 compared with the prior year, according to Marsh’s “Benchmarking Trends: More Companies Purchasing Cyber Insurance.”
Cyber coverage levels also increased according to the report. Across industries, limits purchased in 2012 averaged $16.8 million, a 20-percent increase over 2011. Communication, media and technology companies led other industries in terms of average limits purchased, at $33.4 million, and the rate of increase, which was nearly 36 percent.
“Awareness of cyber and privacy risks continue to grow, especially in the wake of a number of highly visible data breaches, hacking attacks, litigation and increased government focus on cyber security,” said Bob Parisi, Marsh’s network security and privacy practice leader. “As a result, companies are now looking to manage their day-to-day cyber risks in the same way they do more traditional risks—through the purchase of insurance.”
The services industry, including professional, business, legal, accounting and personal services firms, increased most in terms of number of clients purchasing cyber insurance, demonstrating a 76-percent increase compared with 2011. The education sector was next with a 72-percent increase. Financial institutions increased 32 percent.
Marsh said overall rates for cyber insurance were flat in Q4 2012, although market conditions varied significantly by company size, the report found.
Smaller companies, where demand is great and competition among insurers is strong, typically paid less for cyber coverage than larger companies, which are experiencing more severe and frequent claims.
Through separate research, The Hartford Steam Boiler Inspection and Insurance Co., a member of Munich Re's Risk Solutions family, sees an opportunity in data breach insurance. Click here to read more.
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