The cyber insurance market in the Asia-Pacific (APAC) region is set to reach an estimated $1.7 billion in 2024, according to a new report by Guy Carpenter. This growth comes amid rising concerns over evolving cyber threats, particularly ransomware, which continues to drive insurance claims across the globe.
Globally, the cyber insurance market is forecasted to reach $16.6 billion in 2024. North America remains the largest market, with an expected share of $10.5 billion, followed by Europe at $3.9 billion and the Rest of the World at $0.5 billion.
After a period of significant rate increases in 2021 and 2022, the market has stabilised. Rates flattened or declined in 2023 and are expected to continue adjusting in 2024, as highlighted in Guy Carpenter’s “Behind the Firewall: 2024 Global Cyber Industry Insights” report.
This stabilization is fueled by factors such as under-penetrated industry segments, emerging markets, and the introduction of new insurance products. However, while growth is evident, Guy Carpenter cautioned that the industry is still grappling with increasing aggregation risks, especially through vendor models and partnerships.
The global aggregation loss potential is projected to range from $20 billion to $46 billion at a 1-in-200-year return period. As a result, the market loss ratio is expected to be between 120% and 277%, signaling potential challenges for insurers.
In addition to ransomware, Guy Carpenter stressed that the cyber insurance industry must address other systemic risks. Despite efforts to improve visibility into these risks, there is ongoing debate about how much non-malicious, accidental events contribute to the overall financial losses.
As the cyber landscape continues to evolve, insurance providers will need to stay ahead of emerging threats to ensure the stability of the market.
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