U.S. Private Cyber Insurance Market Growing, Capable of Handling Most Risks, R Street Says

The U.S. private cyber insurance market is continuing to grow and is capable of managing most risks, the R Street Institute reported Thursday. The free-market think tank said that sector is growing at a rate of between 25 and 50 percent annually, netting $2.75 billion in premiums in 2015. U.S. cyber insurance premiums are expected to rise to $7.5 billion by 2020, R Street said. Policies with a $50 million limit “would be able to cover roughly 92 percent of cyber-event claims,” R Street said. The likelihood of a major cyber incident that causes $250 billion-$1 trillion in damage during the next decade is between 10 and 20 percent, the group said. The potential for that sort of “black swan” event requires a government “backstop” or reinsurance entity to manage U.S. cyber exposure, R Street said. “The cyber insurance market is growing rapidly and ... already has sufficient capacity to cover the overwhelming bulk of events the market already has faced,” R Street said. “Businesses report they are satisfied with their existing cyber coverages."