The cyber insurance market will triple in size to $7.5 billion (£4.8bn) in annual premiums by 2020 and the insurance industry could face competition from disruptors such as Google if it does not act fast to develop products, a report said.
Insurers and reinsurers are charging high prices for cyber cover and putting a ceiling on potential losses, deterring companies from buying cyber polices, consultancy firm PwC said in the report.
Some insurers have also so far kept out of the market, wary of the risks involved despite the potential rewards.
“If the industry takes too long, there is a risk that a disruptor could move in and corner the market by aggressively cutting prices or offering much more favourable terms,” PwC said.
Millennials – people in their 20s and 30s – are more likely to trust brands such as tech giants Google or Apple than conventional insurers, Paul Delbridge, insurance partner at PwC, told Reuters.
“I can see Google being very creative,” Delbridge said.
Technology companies may also be better equipped than insurers to price cyber risk, he added.
Potential customers must also remember, however, that cyber insurance is still not an adequate replacement for cyber security.
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