UK Insurer Beazley Sees Opportunity (and Risk) in Cyber Market

UK insurer Beazley Plc returned to profit last year, helped by what it sees as “encouraging” trends in the cyber market. With ransomware attacks becoming more prevalent, the company sees still more opportunity in a market where some peers fear to tread.

The better-than-expected result was in large part thanks to its Cyber & Executive Risk business, which had gross written premiums of $1.52 billion, beating the average analyst estimate of $1.46 billion in a Bloomberg survey. While Beazley has made it a “mission” to support its clients in the prevention of and recovery from a cyber attack, it has also reduced its cyber exposure to focus on “the higher quality risks while achieving significant premium growth,” the company said.

“For any business owner, nothing can be more traumatic than waking up to find your systems are locked,” it said. “We believe that a collaborative approach focused on mitigating the threat will help to counter the sophisticated challenge to business everywhere that cyber criminals pose.”

A cyber attack targeting fuel storages in Germany and parts of northern Europe in recent weeks left swaths of fuel depots unable to load onto trucks. European regulators are telling the region’s banks to be vigilant about potential hacking attacks as tensions rise between Russia and Ukraine.

The increase in cyber crime and an increasing amount of people working from home has led to “enormous” opportunities for insurers, according to Bloomberg Intelligence. “Insurers can add real value by offering coverage aimed at cyber attacks and other security breaches, generating new revenue opportunities for the likes of providers such as Beazley,” BI said.

Photograph: A student types on a keyboard during a cyber-defense programming class in the “War Room” at Korea University in Seoul, South Korea. Photo credit: SeongJoon Cho/Bloomberg.