Swiss Re estimates global cyber premiums will reach $US16 billion ($25.4 billion) this year, and rise to $US25 billion ($39.69 billion) by 2026. 

As intangible assets such as digital data increase, dependency on this digital infrastructure makes such assets more vulnerable to business interruption and cyberattacks, Swiss Re says in a new Sigma report.  

Digitalisation creates new risk pools and this opens new opportunities for insurers, and is a source of new growth and as well as new efficiencies for the industry. 

“Growing business interruption and cyber risks emerge as the flip side of reliance on digital infrastructure,” the Economics of Digitalisation in Insurance report says. The global value of intangible assets has increased fivefold over the past 20 years, and Swiss Re says close to 80% of that value remains uninsured.  

“Firms will need protection against digital risks, for example business interruption and cyber risks, as well as the emerging liability risks related to AI,” it said. 

Insurers can help achieve such coverage through innovative digital risk transfer solutions, it says. 

“Our industry should see this as an encouragement to continue investing in innovative solutions and adapting to emerging risks,” Swiss Re Group Chief Digital & Technology Officer Pravina Ladva said. 

"Despite the rapid digital transformation of the insurance industry, accelerated by recent advancements in cutting-edge technology, we still see significant potential to make insurance more accessible and affordable for consumers.” 

In just one example, digital technology has facilitated sharing-economy business models, and this has resulted in fundamental shifts in operational risks and liabilities – requiring innovative insurance risk transfer solutions.  

Potential benefits throughout the insurance value chain are “far from exhausted,” it said, and insurers are targeting a 3–8 percentage point improvement in loss ratios and savings of 10–20% in other parts of the value chain through digital transformation. 

Gains from better underwriting, risk mitigation and risk measurement from digitalisation of insurance improve the quality and efficiency of their work, Group Chief Economist Jerome Haegeli said. 

"The study clearly shows a positive correlation between resilience and digitalisation. For society, digitalisation is a force for giving more people access to insurance and thereby closing protection gaps.”  

Swiss Re’s Insurance Digitalisation Index tracks the progress made in 29 countries. South Korea, Sweden, Finland and the US topped the index. Advanced markets with strong physical infrastructure and high internet access rates have made most progress in digitalising their economies, it found, though China, Slovenia and India are catching up. 

“Emerging markets can jump straight into adopting newer digital technologies rather than transitioning from legacy systems,” it said. “They should benefit from faster catch-up growth.”