Report Produced by the United States Government Accountability Office – May 2021
Insurers and Policyholders Face Challenges in an Evolving Market
This report addresses (1) the state of coverage and key trends in the current market for cyber insurance, and (2) identified challenges faced by the cyber insurance market and potential options to address them. The focus of this report is cyber insurance provided to businesses and other entities and not to individual consumers.
What GAO Found
Key trends in the current market for cyber insurance include the following:
• Increasing take-up. Data from a global insurance broker indicate its clients’ take-up rate (proportion of existing clients electing coverage) for cyber insurance rose from 26 percent in 2016 to 47 percent in 2020.
• Price increases. Industry sources said higher prices have coincided with increased demand and higher insurer costs from more frequent and severe cyberattacks. In a recent survey of insurance brokers, more than half of respondents’ clients saw prices go up 10–30 percent in late 2020.
• Lower coverage limits. Industry representatives told GAO the growing number of cyberattacks led insurers to reduce coverage limits for some industry sectors, such as healthcare and education.
• Cyber-specific policies. Insurers increasingly have offered policies specific to cyber risk, rather than including that risk in packages with other coverage. This shift reflects a desire for more clarity on what is covered and for higher cyber-specific coverage limits.
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