By Michael Jones

Feb 11 - (The Insurer) - Global cyber market premiums grew to around $16.6bn in 2024 with the bulk of business continuing to originate from North America, according to a report by Guy Carpenter.

• US largest contributor despite slowing growth

• Insurtechs drive greater competitiveness in European market

• Cyber take-up slowly increasing in Asia but penetration remains low

The reinsurance intermediary said that while North American carriers account for a significant proportion of global premiums, there has been a notable surge in growth in both Europe and Asia.

In total, North America accounts for 63.44 percent of global premium income. This is followed by Europe at 23.62 percent, Asia Pacific at 10.02 percent, and the rest of the world at 2.92 percent.

Although it remains the largest contributor, Guy Carpenter said that the growth rate for US cyber premiums slowed in 2024.

It said this reduced growth reflected the market closing in on its full potential rather than any reduction in appetite or capacity.

Penetration into smaller revenue bands, emerging industry sectors and personal lines business could be significant drivers of future North American growth, said Guy Carpenter.

In the European market, the Marsh McLennan-owned intermediary said prices decreases and availability of cover increased as the entrance of insurtechs drove greater competitiveness.

Market growth has been most acutely seen in the large-risk segment, which Guy Carpenter said was a result of business continuity becoming increasingly dependent on cyber infrastructure.

Proposed EU regulation and a year-on-year increase of 50 percent in GDPR fines mean cyber exposures remain in the spotlight, although purchasing motivations continue to be driven by first-party risk concerns.

Earlier this month, Marsh’s global rate index showed cyber insurance rate decreases had accelerated to 7 percent in the fourth quarter of 2024, with declines continuing in every region.

In the US, cyber rates decreased by 5 percent, while European cyber rates decreased by 14 percent.

Low Asia penetration but take-up increasing

Although Guy Carpenter said the Pacific cyber market is “a relatively mature product”, insurance penetration in Asia is estimated to be as low as 4 to 7 percent.

“Cyber take-up for SMEs in Asia is currently low but rapidly increasing, representing the highest growth rate,” said Guy Carpenter.

Due to the relative lack of experience with cyber products in Asia, underwriters have demanded strong risk controls from clients in order to access coverage, with ransomware a particular focus given its frequency.

Guy Carpenter said insurers have been willing to expand their regional coverage offering as recent rate reductions and increased capacity have made it a favourable environment for buyers.

Marsh said Asia cyber rates decreased by 11 percent in the fourth quarter, while the Pacific saw quarterly decreases of 8 percent.

LatAm and the Middle East

Cyber take-up rates in Latin America and the Middle East have also been slowly rising, with growing appetite among carriers to diversify their books into these territories.

This growing interest has also been supported by government initiatives to build digital infrastructure.

These include the International Finance Cooperation’s desire to invest in data centre infrastructure in Latin America, and the Gulf Cooperation Council’s strategic lean into digital infrastructure and high-tech industries.

But Guy Carpenter said the promise of these initiatives has been challenged by a lack of standardisation of these markets, which can make purchasing cover more costly for buyers.