Cyber has been the ‘golden class’ for a number of years. Much hyped by insurers and brokers as the key new category of the future, and sometimes even viewed as a replacement for many ‘old-fashioned’ physical risk-focused policies; buyers have begun to see it as a necessary purchase and part of their regular suite of business cover.

Insurers have all looked to grow their cyber accounts, and many have done so. However, the last couple of years have seen an increase, not only in the frequency of ransomware attacks, but also the severity of them, and this has begun to impact rates and capacity.

Cyber insurers have been offering full limits on cyber extortion for years, but in our view, in 2021, for the first time, this is likely to change, with sub-limits being introduced and carriers becoming more selective over the risks they choose to underwrite. One thing is certain, 2021 is going to be an interesting year for the cyber market, for cyber underwriters, brokers and most of all, for customers.

For customers, one event will be important above all others next years. This year will see the scaling up of the worldwide rollout of 5G networks, with North America, Europe and East Asia leading the way. The importance of 5G has grown since the onset of the pandemic, with much of the world switching to remote working and requiring faster, more reliable data speeds and network management in order to continue operating efficiently. However, 5G brings with it a new cyber threat landscape that is yet to be clearly seen by customers.

The rollout of 5G will continue to enhance the expansion of the IoT age in almost all industry sectors and many homes, as more and more smart devices connected to the internet become essential everyday equipment. This poses an explosion of vulnerability avenues for criminals to exploit seemingly secure networks almost undetected.

Both B2B and B2C companies must prepare to invest in more sophisticated and increased levels of monitoring of their networks, controls and technology. They will place more and more reliance on IT experts to ensure adequate protection is in place, in spite of a widening IT skills gap. And they will have to do so at speed – planning for the increased risks associated with 5G should already be well developed. Those who have taken their eye off the ball, perhaps distracted by adjusting their operations to cope with COVID-19, run the risk of increased vulnerability.

The same applies to cyber insurers. They have a responsibility to be 5G-ready too, in terms of making sure that their cyber insurance offerings are up to speed and they are providing their clients with adequate protection. In 2021, we will see cyber insurers and buyers scrambling to be ready for the roll-out of 5G; wordings are likely to change, coverage could be challenged, and we should expect some related upheaval.

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