Lloyd's of London Chief Executive Officer Inga Beale expects the market for cyber insurance to surge after hackers attacked some of the largest companies in the U.S., including JPMorgan Chase & Co. and Home Depot Inc.
Beale, who took over as CEO of the world's oldest insurance market in January, said many businesses are not yet alert to the risks of an attack on their computer systems or the need to buy coverage. She said cyber insurance can cover loss of future revenue and reputational damage, as well as provide assistance to get systems back up and running.
“Cyber is a new risk and it is a concern,” Beale, 51, said in an interview with Bloomberg Television's Guy Johnson in London. “Lloyd's is at the heart of cyber attacks, providing coverage right now. It's going to grow dramatically with all the high-profile hacking incidents.”
JPMorgan last week outlined the scope of a previously disclosed data breach, revealing that 76 million households and 7 million small businesses had been affected in one of the largest cyber-attacks on record. A month earlier, Home Depot confirmed a security breach had compromised 56 million payment cards.
Marsh & McLennan Cos. estimates that the U.S. cyber insurance market could double this year to $2 billion in gross written premiums from an estimated $1 billion in 2013. In Europe, the market is estimated to be less than $150 million, rising by 50 percent to 100 percent annually, according to Marsh.
Beale's comments echo that of Tom Ridge, the first U.S. homeland security chief under President George W. Bush, whose new insurance company has teamed up with five syndicates at Lloyd's including Brit Plc and Aegis London. He said earlier this week that the “extraordinary” breaches at JPMorgan and Home Depot highlighted the increasing sophistication of the attacks.
Bloomberg News
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