Ambitious insurers target cyber and takaful
Insurers are increasingly looking to build out new specialist areas with cyber insurance and sharia-compliant insurance being two of the biggest areas of focus for firms.
A report by Deutsche Asset & Wealth Management on developments in the insurance investment market listed five specialist areas that insurers are increasingly targeting: cyber protection, professional indemnity, micro-insurance, weather and takaful or sharia-compliant insurance.
The cyber protection market has grown to $13 billion annually in the US, according to Allianz, driven in part by regulation obliging firms to inform US authorities of online cyber attacks.
The European cyber protection market is also forecast to grow. It is estimated that by 2018 the market will reach €700 million to €900 million as new legislation requiring companies to report cyber attacks and abide by tougher data protection rules come in to force.
It is predicted that the market for professional indemnity insurance across ten European countries will be worth around €7.5 billion by 2017 versus €6.78 billion in 2013, having grown from approximately €6.15 billion in 2009, according to research by Finaccord. The UK is estimated to have the largest market, followed by Germany and France.
In emerging markets, micro-insurance and weather insurance are becoming increasingly popular with the total value of the global micro-insurance market now exceeds $40 billion, according to Swiss Re. The weather insurance market is growing in India with the support of global reinsurers and government subsidies.
Takaful, or sharia-compliant insurance, has seen significant growth in Malaysia and Indonesia. Malaysia is the biggest takaful market worldwide. However, even in Malaysia, the market penetration of takaful is only 10 percent, compared to 40 percent for conventional life insurance.