Insurance crisis: Small companies fight against increasing risks!

Insurance crisis: Small companies fight against increasing risks!

An alarming increase in commercial risks was noted at this year's DKM. These developments are due to increased claims costs and high utilization, which make it difficult for many insurers to offer adequate insurance coverage. According to the BVK, it has been shown that the willingness of fire industry insurers to underwrite towards small and medium-sized companies (SMEs) has decreased significantly. Sectors such as recycling, electroplating, wood processing, food and meat processing are particularly affected.

A current report by the BVK among industrial brokers shows a worrying underwriting shortage in many sectors. Larger farms are also increasingly struggling to obtain the insurance coverage they need. The list of underwriting bans is growing, which suggests consulting competent commercial brokers.

Coverage issues and cyber insurance

The coverage issue affects different types of companies differently. While freelancers and small service businesses are less affected, business and financial loss liability insurance as well as cyber insurance are more in demand than ever before. According to an SME study by Barmenia Gothaer, only 20% of medium-sized companies had a cyber policy in 2023, and in 2024 this proportion rose to over 25%. Companies' biggest concern is the frequency of hacker attacks (48%), followed by human error (41%) and operational failures (40%).

Allianz notes that corporate liability, contents and building insurance are experiencing high demand. Nevertheless, around a fifth of insurance intermediaries forego commercial business, which is due to the increasing complexity of the products. This is happening in a context of rising claims expenses due to inflation, which directly influences the tariffs of insurance products.

Market development of cyber insurance

Regarding the cyber insurance market, forecasts from Market Research Future show that global sales are expected to reach $64.49 billion by 2030. The annual growth rate is estimated at 26.57% for the forecast period. Cyber ​​insurance offers companies essential financial protection against threats such as ransomware, malware and other cyberattacks.

The COVID-19 pandemic has increased the risk of cyberattacks and thereby influenced the demand for cyber insurance. Increasing cyber risks and policy initiatives are driving market demand, while privacy laws such as HIPAA and GDPR could further fuel this demand. Despite these positive developments, there are also challenges: high costs and inadequate coverage for compromised systems, as well as a shortage of cybersecurity experts, could limit market growth.

The North American market is considered the leader in the cyber insurance sector, followed by Europe. The cyber insurance market is expected to continue to grow, particularly in the IT and telecommunications industries, which could experience a CAGR of 33.24% through 2025. A focus is on first-party coverage, which currently dominates the market.

Overall, current developments in both the commercial insurance sector and the cyber insurance market show that companies urgently need creative solutions to protect themselves against increasing risks and challenges. This makes it all the more important to find out about competent providers and innovative products.

For more information about commercial insurance challenges, visit cash-online.de and details on the cyber insurance market forecast can be found here marketresearchfuture.com.