Hannover Re aims to keep cyber business broadly stable

Carrier to write €550m to €600m of cyber premiums this year

Hannover Re intends to keep its exposure to cyber insurance roughly steady, the company said today. The company expects to write €550m to €600m of cyber premiums this year. That implies a market share of around 6% in a sector estimated at around $10 bn annually.

Hannover Re has no plans to increase its market share at a time when inflation, climate change and geopolitical uncertainty are raising the spectre of outsize claims in many different lines of insurance, the company said at the Rendez-Vous de Septembre conference in Monte Carlo.

"We'll stay stable, just meaning we grow with the increase in the underlying volume," said Silke Sehm, a board member at Hannover. "But we're not further increasing our risk appetite across the business in general."

The company will seek to balance its geographical exposure by building up cyber cover in emerging markets, added Michael Pickel, another member of the board.

The size of the cyber insurance market is projected to double to $20bn in the next four years. But to maintain that rapid growth, the industry may need to look for new sources of funding.

"The future of cyber insurability will most likely go towards the capital markets," said Jean-Jacques Henchoz, chairman of Hannover's board. "The long term potential for growth will necessarily need to involve different sources of capital to diversify the exposures."

Although much discussed, capital markets offerings for cyber insurance remain rare.

Munich Re, another of the top reinsurers, writes around $1.4 bn of cyber business annually. The company said today it expects to see its market share fall as the market grows.