Despite the near-ubiquity of cyberrisks and the growing awareness of the threat these risks pose to businesses, cyber insurance still only represents a tiny fraction of the overall insurance market.
Demystifying Cyber Insurance Coverage, a report by the Deloitte Center for Financial Services, suggests that there are a number of obstacles facing both insurers and consumers that could explain why the market for cyber insurance has not been stronger.
From the insurer’s perspective, several challenges have prevented them from offering the products that buyers are looking for, including the lack of historical data about cyber exposures and claims, the continually evolving nature of cyberrisks, the catastrophic potential for loss, and a narrow focus on what constitutes cyberrisk in the first place.
At the same time, buyers have been reluctant to purchase cyber policies because they often do not fully understand the risks or the available insurance options. They are also deterred by the facts that cyberrisks can be spread over a wide range of coverages, policies lack standardization, and the legal landscape remains unsettled.