Cyber market reaches $16.6bn – Guy Carpenter report

The cyber insurance market continues to expand, but pricing is relatively stable, according to Guy Carpenter.

The reinsurance broker’s paper, “Behind the Firewall: 2024 Global Cyber Industry Insights”, provides an update on developments across the sector.

As the cyber market continues to expand, capacity providers, carriers, third-party services firms, and other members of the cyber ecosystem are contemplating new opportunities to grow without compromising performance.

To support them on this journey, this study provides valuable insights on multiple dimensions of the cyber market.

Key takeaways

• After very large compound rate increases in 2021 and 2022, the market has stabilized while experiencing modest softening in certain areas.
• This has culminated in a market that has expanded to an estimated $16.6bn in 2024, with North America making up the majority at $10.5bn, Europe at $3.9bn, Asia Pacific at $1.7bn, and the rest of the world at $0.5bn.
• Although a significant portion of global premium still comes from carriers focused on North America, there has been a notable surge in growth in Europe and Asia.
• Ransomware/malware events remain the main driver of losses. Guy Carpenter’s understanding of the cyber threat landscape shows that ransomware/malware events remain a key concern for the industry, reinforcing this result.
• Global accumulation potential modeling reveals significant potential losses, with 1-in-200-year occurrence losses estimated between $20bn and $46bn.

“As global cyber insurance premiums continue to increase, there has been a shift in the geographical distribution of the business,” said Erica Davis, global co-head of cyber, Guy Carpenter.

“Although a significant portion of global premium still comes from carriers focused on North America, there has been a notable surge in growth in Europe and Asia. This acceleration in growth is good news for global reinsurers’ desire to diversify their exposure, which further helps unlock new capacity in the regions,” Davis said.

Anthony Cordonnier, Guy Carpenter’s other global co-head of cyber, continued: “This year’s study shows that the modeled outputs have increased across all return periods and the extreme tail due to a combination of a change in exposure year on year and the updates introduced by the newer versions of the vendor models.”

He added: “Market dynamics have shifted with an increased proportion of larger companies purchasing more cover across the board at relatively lower deductible levels. This growth in sum insured alongside a turbulent and ever-changing threat landscape has contributed to the development in vendor model losses.”