Francois Villeroy de Galhau, governor of France’s central bank, is calling insurance companies in the country to significantly step up their cyber risk coverage for clients.
As cyberattacks and data privacy laws in Europe have resulted in a higher demand for cybersecurity protections, Reuters reported, Villeroy noted that insurance companies must close the gap.
“With the help of reinsurers, insurers should be able to meet demands of cyber risk coverage, a concern that affects all businesses,” he said during a conference in Paris.
The European cyber insurance market has grown significantly in recent years, but is still quite small compared to that of the U.S.
Late last year, analysts at PricewaterhouseCoopers said that the corporate cyber insurance market that is currently worth more than $3 billion will grow to more than $7.5 billion in premiums by 2020. Those premium totals will be driven by rising prices.
Experts say that, in comparison to other types of insurance, this is not only significantly higher but is in reference to a lack of major catastrophes of these aforementioned magnitudes, affecting more people in one single incident. They add that no other type of insurance has grown as quickly, with some carriers reporting that they’re doubling their book year over year. Other types of insurance are slated to decline in the coming years.
The insurance, which is solely applicable to data breaches, includes notifying customers and complying with regulations.
In a recent survey, Marsh & McLennan’s broker unit said nearly 28 percent of companies in Europe have been affected by a cyberattack within the last 12 months, but only 13 percent have made the move to purchase cyber insurance.
The firm estimated that the value of global cyber insurance premiums outstanding is around $3.5 billion with 3 billion coming from the U.S., and just $300 million coming from Europe.
“Insurance companies should learn from their own experience … in order to create a more mature market in France and Europe for insurance against cyber risks,” Villeroy added.