2015 will be remembered as the year the Cyber insurance market began to really take shape. The market remains robust and continues to present for insurers opportunities for unprecedented growth. However, the market conditions for large and small to medium-size enterprises differs greatly. That is because, in part, insurers are targeting small and mid-size enterprises as highly profitable. 2015 will also be remembered as the year data breach coverage disputes under stand-alone cyberinsurance policies began to leak into the courts. This article will address these trends of continued, albeit segmented, market growth and cyber-coverage litigation and whether we can expect them to continue in 2016.

An insatiable demand for Cyber insurance

We have continued to see in 2015 once-in-a-lifetime growth in the insurance market, driven almost exclusively by Cyber insurance. And, growth trends are showing no signs of slowing. According to a survey conducted by RIMS, 74 percent of those without Cyber insurance are planning on buying it within the next one to two years. Likewise, total annual premiums for stand-alone Cyber insurance are projected to grow to $20 billion by 2025. This growth stems, in part, from increased awareness of the importance of first-party Cyber coverage and business interruption risks from data breaches.