According to the latest Allianz risk barometer, cyber risks are ranked number 1 among risks that threaten economic activity. This new threat is at the origin of a whole new market, that of Cyber-insurance.
As in many sectors, the digital revolution has also begun in the insurance sector. For many players in the sector, digital technology is a real lever for competitiveness. Except that the bitter observation that has emerged in recent years is that the sector is facing the other side of the digital coin. “These digital services, beyond their advantages, are gateways that cybercriminals can crack,” warns Redouane Benatik, Cybersecurity Expert. According to the latest Allianz Risk Barometer report, cyber incidents and business interruption are the top concerns for businesses around the world for the second year in a row (with 34% of responses in both cases). In detail, cyber incidents, such as IT outages, ransomware attacks or data breaches, rank as the most significant risk globally for the second year in a row. It also ranks as the number one peril in 19 different countries, including Canada, France, Japan, India, the United Kingdom and even Morocco.
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On the money side, the average cost of a data breach is estimated at $4.35 million and is expected to exceed $5 million in 2024. These growing digital risks have given way to the emergence of a new sector, particularly that of cyber insurance. According to a 2022 industry study by insurer Munich Re, for the first eight months of 2022, global cyber insurance premiums stood at USD 9.2 billion. They should reach 12.83 billion USD at the end of the same year compared to 10.33 billion USD in 2021. Still according to the insurer, the market plans to reach 22 billion USD in turnover by 2025 and 63 .6 billion USD in 2029. Internationally, at the end of 2022, more than 220 insurers underwrite cyber risks globally compared to 180 in 2021. The cyber insurance market records 13.5 billion USD in premiums in 2022 compared to 8.6 billion USD a year earlier, an increase of 56.67%.
The leaders in this market, namely Munich Re, Chubb, Beazley, Fairfax Financial Holdings and AXA, recorded USD 4.362 billion in cyber premiums, representing a cumulative market share of 32.3%. The top 20 insurers account for 70% of global collections compared to 76.6% in 2021. As a reminder, Lloyds of London, which is not in the top 5, however, remains the main market specializing in cyber insurance. The latter totals 20% of all global premiums, or 2.7 billion USD in 2022 compared to 1.72 billion USD in 2021. Estimated at 6,000 billion dollars in 2021 according to “the criminal law report under the test cyberattacks” from the Lawyers’ Club, cyber risk is expected to reach $10.5 trillion in 2025 with a growth rate of nearly 15% per year.-
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In Morocco, the bitter observation is that the business ecosystem remains exposed to this problem and as a result, a whole section of the economy remains impacted. It is indeed an indisputable fact that cybersecurity represents a crucial issue for all companies, especially for those operating online (e-retailers, online banks, digital media). According to the U.S. National Cyber Security Alliance, 60% of small businesses that fall victim to a cyberattack go bankrupt within six months. In detail, cyberattacks cost small and medium-sized businesses more than $2.2 million per year. These costs can arise from various incidents that occur following a cyberattack or vulnerability. Additionally, 43% of small businesses do not have an established cybersecurity defense strategy, reveals the Imperva Research Labs study on cybersecurity risks impacting businesses. “Cybercriminals have established a form of solidarity among themselves regarding the sharing of detected vulnerabilities,” specifies the expert.
In Morocco, in recent years we have seen certain insurance players offer solutions to deal with this scourge. On its site for example, AFMA, one of the leaders in this sector, with its CyberEdge offer offers a specific offer to protect against these risks. For its part, the Allianz Maroc group offers direct access to experts in IT investigation and remediation. They are able to advise and help companies manage crises, but also to take care of compensation and reimbursement of operating losses caused by the unavailability of systems. “Today, cyber risk is the number 1 risk identified by business leaders,” tells us Hicham Alaoui, CEO Alliance Trade. For Jallal Benchekroune, DG Atlanta Sanad Assurance “with the growing emergence of digital technology, we will increasingly experience the development of this new offer, particularly that of cyber insurance. Although offering enormous benefits, digital technology exposes businesses to great threats. And added: “Although being fashionable in the West, in Morocco we nevertheless face data collection problems. The groups affected by these risks hardly communicate for the sake of their image, so it is difficult to collect data, which is a key element in this activity. In addition, it should be noted that to date, it is difficult to say what the sector is worth today because in Morocco there is no typical cyber risk category, these are risks which are integrated into the framework. special risks.
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Ausim, which for several years has brought this subject to economic operators, through its Vice-President Rachid Baarbi, declares: “In any risk management strategy we find “risk transfer” as an element of response, in addition to risk avoidance, acceptance and mitigation. Cyber insurance allows the organization to transfer its risk and to be supported by experts in order to calmly face the financial, legal and reputational damage caused by cyberattacks and fraud. But the bottom line is that insurance policies generally cover the consequences and follow-up events associated with a data breach or cyberattack and are no substitute for having a strategy in place. which remains the first line of defense against cyberthreats to face the growing challenges of the digital world in the era of artificial intelligence. And to continue “In Morocco, the cyber insurance coverage market remains embryonic in the face of a systemic threat for several reasons: namely, the uncertainty in the financial assessment of Cyber risk and the probability of its occurrence which is extremely difficult to be specified, which often makes cyber insurance contracts less attractive, particularly for VSEs/SMEs. Finally, subscribing to a cyber insurance policy is very wise for an organization these days to deal with growing cybercrime so that it can remain focused on its business with complete peace of mind.