Besides being able to shop whenever and wherever, as well as stream movies and music, the digitization of the personal space has many other, more tangible, benefits too. Globally, more than three quarters (76%) of account-owning adults make digital payments and rely on online banking to meet other day-to-day financial needs.
Rapid advances in technology are enabling new services all the time. Internet of Things (IoT) devices are connected to and send information via the internet, enabling them to be controlled by phone, tablet, or PC. More than half of the world's households (53.6%) are already connected to the internet, with the percentage going up to over 84% if only considering the developed world. Overall, the number of smartphones in use is predicted to hit 3.8 billion by 2021.
It may feel like we already live in an interconnected world. But the reality is we are still only in the early days of this new wave of expanded digitization. There will be an abundance of opportunities to come, but that will also mean a greater need for risk awareness and mitigation. In our increasingly connected world, the risk does not stop just because of switching off one's computer or smartphone. It has been predicted that by 2030 there will be around 125 billion IoT devices globally, which represents a huge potential for cyberattacks.
Some figures quoted by Swiss Re are relevant: 978 million consumers have undergone a cyber-attack only in 2017, 1.12 billion identities were stolen in 2016, USD 172 billion were stolen in 2017 via cyber-attacks etc.
A global survey conducted by Swiss Re shows that the most feared cyber risk scenarios that people worry about most are:
- illicit access of financial credentials (a hacker gets access to your online banking details and might therefore be able to steal money)
- identity theft (an attacker steals your digital identity to purchase goods or services online in your name)
- data loss due to a technical issue (your personal data gets deleted by a virus or software glitch)
- illicit publication of personal data (somebody else publishes your private pictures online)
In 2018, the worldwide market for standalone commercial cyber insurance is estimated to be around USD 4 billion to USD 4.5 billion. There is widespread industry consensus that the market will grow with annualized double-digit rates to between USD 7.5 billion and USD 10 billion by 2020. Swiss Re estimates the personal cyber insurance market will grow to between USD 1.6 billion and USD 3.1 billion by 2025. To this end, insurers should go beyond offering just financial loss recovery, to combine personal cyber insurance with value-adding services, as customers seem to prefer according to the mentioned survey.
Read the full version of the Swiss Re white paper Personal cyber insurance: Protecting our digital lives