Non-US territories are set to capture 54% of growth in the cyber insurance sector up to 2030, according to a new report from Howden, with huge potential for growth in other regions as well as significant scope for serving a broader client base amongst SMEs globally.

Its fourth annual cyber report – Risk, Resilience and Relevance – found that following a major market correction off the back of surging ransomware claims in 2020 and 2021, conditions started to stabilise last year as improved cyber management among organisations helped to prevent or mitigate the impact of attacks.

Sarah Neild, UK head of cyber retail at Howden, said: “Favourable dynamics have persisted into 2024, with the cost of cyber insurance continuing to fall despite ongoing attacks, heightened geopolitical instability and the proliferation of Gen AI. At no other point has the market experienced the current mix of conditions: a heightened threat landscape combined with a stable insurance market underpinned by robust risk controls. The foundations for a mature cyber market, with innovation and exposure-led growth at its core, are now in place.”

The report suggests that carriers and brokers have made significant progress in the past few years of enhancing price stability, coverage clarity and the consistency of terms and conditions. Against this backdrop, the market now has two stand out opportunities to achieve Howden’s global premium projection of US$43bn by 2030 through significant expansion beyond the US and serving a broader client base amongst SMEs.

Cyber insurance has been dominated by the US to date, accounting for approximately two-thirds of the global market, and will remain key, but Howden’s research also shows that more than half of premium growth up to 2030 is likely to emanate from non-US territories. In the major European economies of Germany, France, Italy and Spain alone, the premium uplift potential in just replicating penetration levels achieved in more mature markets is in the region of €700m.

Jean Bayon de La Tour, head of cyber, international, added: “Cyber insurance is key to strengthening resilience around the world and insurers are now in a strong position to bring about real change. This involves providing more capacity to meet pent up demand in currently underpenetrated regions, including Europe, Latin America and Asia, areas where Howden is investing strongly. The potential for growth is huge, particularly as most of these countries are coming off such a low base.”

Howden says that the SME space, which accounts for close to half of GDP in advanced economies, also offers huge opportunity as brokers and insurers find better ways to bring this currently underserved demographic into the cyber market. Research from the World Economic Forum suggests that only 25% of SME organisations globally have cyber insurance compared with 75% of larger firms.

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