The insurance perspective on cyber risk over a 10-year horizon

Swiss Re, in collaboration with IBM®, undertook a global survey of insurers and corporations at the beginning of 2016. The broad aim was to find out more about the impact of digital interconnectedness and how insurers are going to respond to it. The main findings are summarised below:

Increased risks from interconnectedness

There is broad consensus that risks arising from interconnectedness will grow. This will be driven by, for example, ecosystems and the Internet of Things (IoT). This will cause companies to seek cooperation with the insurance sector for assistance in risk mitigation. Insurers will also be called on to help corporations understand the hidden risks of interconnectedness and to come up with solutions to manage those risks.

As a result, the market for cyber insurance will grow markedly over the next ten years. Furthermore, as companies seek new types of cover involving different types of risk (plus risk mitigation), insurers will establish partnerships with other service providers to offer a one-stop shop.

Emerging trends

80% of insurance companies surveyed believe that cyber insurance should be mandatory in some industries. This may be another demand driver over the next 5 - 10 years. The US, a pioneer in cyber risk management, has already introduced mandatory cover in some areas.

Insurers also see strong innovation potential with scope to adapt their offering and exploit technology, for example by offering more flexible products. Real-time pricing is one example of what insurers are bringing to the market now. The emphasis for insurers will move towards measuring IT security and quality of risk management, also with real-time data (new risks). Cognitive technology will play a growing role in this method of risk measurement.


As cyber risks grow so will demand for insurance and add-on services. Insurers will need to work with corporations and understand their needs to effectively meet this demand. As a result, there will be a strong incentive for insurers to innovate and adapt in their approach to cyber risk. Mapping risks effectively will remain key as networks continue to grow, with resulting risk accumulation.

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