Cyber insurance market a ‘massive opportunity’

Coalition has said that the UK cyber insurance market is a “massive opportunity” after finding businesses across the British Isles were less likely to take up such coverage.

The San Francisco-based cyber insurer launched in the UK in 2022 and is backed by a multi-year capacity agreement.

The firm distributes its products via brokers to the small and medium sized enterprise (SME) sector.

Stephen Wares, Coalition’s head of risk engineering for the UK, told Insurance Times that the firm had since doubled its headcount, helping it interact with more brokers and subsequently reach more customers.

He said there were 5.5m businesses registered in the UK, with most being SMEs.

“With a low overall cyber insurance penetration rate, millions of companies remain unprotected, especially the smaller organisations that most need protection,” Wares said.

”Thousands of customers now trust Coalition to be there for them in the event of a cyber attack as well as utilising our continuous risk monitoring to improve their security posture.

”But, we are less than 0.1% of the way there and this presents a tremendous opportunity for Coalition to deliver our security tools, our incident response capability and insurance to the unprotected in the UK.”

Risk

This came after Tom Draper, Coalition’s UK head of insurance, said only 7% of companies and 8% of charities were reporting active policies.

In a blog by Draper, titled Reflections on Coalition’s first year in the UK market, which was published on 12 September 2023, he said: “Cyber risk knows no bounds. While threat actors’ motivations may vary, they operate on a global playing field with little regard for industry, revenue band, or location of victims.

“As this global risk becomes more prevalent, so will cyber insurance. But we have a long way to go.”

As a result, John Roberts, Coalition’s UK general manager, said the firm was ”pushing ahead rather than celebrating”.

“We’re especially excited about the growth in organisations using Coalition Control, our cybersecurity tooling, even before they become our policyholders. Knowing and understanding your risk makes solving the problem more approachable.”