With the Global Federation of Insurance Associations (GFIA) citing a $900-billion cyber insurance protection gap, Canadian brokers are seeing a huge growth opportunity in cyber, with some predicting cyber insureds will ultimately overtake the proportion of those covered by property insurance.
“I mentioned cyber earlier on upward of a $1-trillion protection gap and growing,” said Liberty Mutual Canada president Rob Marsh, a panellist at the National Insurance Conference of Canada in Montreal in late September.
“There’s no question in my mind that the cyber marketplace at some point will be bigger than the property marketplace, relative to coverage. So again, you think about that some of those risks today are more important than others. But we’re going to go through a winding road. The speed at which we’re going to do that is only accelerating.”
Federally regulated property and casualty insurance companies wrote more than $475.2 million in direct premium for cyber in 2022. That’s up 217% from the $20.9 million they wrote in 2015, when Canada’s solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), started collecting statistics for cyber.
Insurance Bureau of Canada has picked up on GFIA’s protection gap recommendations.
“IBC is emphasizing GFIA’s recommendations to address the protection gap for cyber risk, including incentivizing and supporting the prevention of cyber attacks, conducting awareness campaigns, developing incident-reporting frameworks, and fostering adaptation measures,” the P&C insurers’ trade association notes on its website.
“The GFIA report used IBC’s Cyber Savvy campaign as an example of how public and private players can educate the public, especially small and medium-sized businesses, on cyber threats and the importance of cyber insurance.”
But to capitalize on the opportunity, brokers need to have a better handle on technology, said NICC panellist Mathieu Brunet, vice president of MP2B Assurance and the Insurance Brokers Association of Canada.
“Brokers should be aware of the tech,” he said. “They should know what AI is. They should know what cyber is. They should understand the computer systems and all of the technology their clients are working on at their businesses.
“So that’s where we go. We need our brokers to be more specialized in more network knowledge, and technology in general, to be able to serve their clients in the future.”
Feature image courtesy of iStock.com/cmannphoto
