To anyone working in financial technology, the vast array of cyber risks in Europe are obvious – hackivists, rogue employees, data leaks; IT security is big business. To insurance firms in Europe, it’s a new opportunity.
Cyber risk insurance is already well-established in the US, but firms in Europe have been slow to embrace it. However, this is likely to speed up following the EU Data Directive, which could exact a fine of 2% of worldwide revenue on a company if it fails to adequately protect data, or notify the authorities of serious breaches.
Job opportunities are emerging within insurance firms. Late last month, Marsh hired Stephen Wares to lead its EMEA Cyber Risk Practices group. He tells us that it’s now the right time to be working in the sector.
“The rapid growth in premiums (now estimated to be $1bn) in the US and greater value placed on cyber risk in Europe make this an excellent market to be part of,” he says. “Relatively new insurance products mean that there is still plenty of room to innovate and lead.”
More companies are looking to take advantage of technology-related revenue streams, but with this opportunity comes increased risk and vulnerabilities to cyber attacks, says Michael Thyssen, European product manager, Chubb speciality insurance team.
“Data breaches of sensitive data and information can cause significant financial and reputational costs to data owning and controlling companies,” he says. “Insurance is one of the ways of mitigating this exposure.”
If you’re working as a broker or underwriter currently, it pays to focus on a niche area, as we’ve mentioned previously. With more firms looking to add an extra revenue streams, cyber risk is becoming an increasing area of focus.
“Cyber risk is a sector where an increasing number of insurance brokers are moving into,” says Andy Edwards, head of insurance at recruiters High Finance Group. “As it’s a new and niche area, there’s not a huge supply of talent available.”
As well as the insurance industry itself, there’s also the opportunity for firms to offer risk advisory services, says Wares. The result is that people working in this area come from a range of backgrounds, from “within the insurance industry, risk consulting and technology audit”, he says.