Demand for Cyber Insurance is Up
As a result of increased technological adoption in modern-day lives, the cyber insurance market has seen tremendous growth in recent years. Businesses are now waking up to the reality of a cyber attack and are reeling from both the direct losses and indirect costs of business interruption, expert advice, and any third-party claims that may arise. It is, therefore, no surprise that the cyber insurance market has a predicted CAGR of 25.3% between 2021 to 2028, and is expected to grow in global value from $7.6 billion in 2021 to $36.85 billion in 2028.
You can find out more about the growth of this sector here.
The result of this phenomenal sectoral growth has been that cybersecurity jobs are now among the fastest-growing career areas in the US. For example, “information security analyst” will be the 10th fastest growing occupation over the next decade, with an employment growth rate of 31% through 2029, seven times faster than the national average growth of 4% for other occupations. But these trends do not stop at the US border – 1.5 million job cybersecurity vacancies are expected by 2025 in India alone.
Cyber insurance professionals, therefore, have gained significant supplier power in recent years – with a wealth of employment opportunities at their feet, the cyber insurance workforce has considerable freedom to look elsewhere if their current working conditions just aren’t cutting it.
Supply of Talent is Down
Decreasing numbers of insurance professionals, together with a shortfall of cyber security knowledge and awareness, has cranked up the challenge of recruiting trained talent into the cyber insurance industry.
The Great Resignation of the Insurance Industry
The insurance industry is faced with two acute workforce problems: the recruitment of skilled professionals and the retention of employees.
The insurance industry is facing an exodus of talent. The majority of its workforce – where one quarter is aged 55 or older – is soon expected to retire. The sector is heavily dominated by the boomer generation which explains why in 2021, the US financial services sector recorded the highest average monthly retirements in over a decade.
On the other hand, today’s younger generations have become increasingly indifferent to a career in insurance, creating a backfill that requires drastic remedial measures. Some reports suggest that as many as 80% of insurance companies need younger talent, but 52% are struggling to recruit employees under the age of 31.
Severe Shortage of Cyber Skills
This is somewhat compounded further by a shortage of trained technical professionals with an understanding of cyber security practices, trends, and developments. The number of unfilled cybersecurity jobs rose by 350% over the past 80 years. More recently, 3.5 million cybersecurity positions were yet to be filled in 2021, up from 1 million in 2013. Although the gap between the supply of cybersecurity professionals and demand for a skilled workforce levels off, this rebalancing is limited and will continue to be outpaced by general market growth.
For more information on the severe talent shortage plaguing the cyber insurance industry, read our article.
The Battle for Talent has Begun, and with it, Cyber Insurance Salaries have Skyrocketed
This shortage of cyber insurance professionals has fanned the flames of employment competition across a variety of businesses operating within the insurance or cyber industries: (re)insurance companies and brokers are finding themselves vying for talent, not only against each other but also against cyber vendors, law firms and technology companies, including Apple and Google.
Astounding Increases in Cyber Insurance Salaries
Now viewed as gold dust by recruiters, cyber insurance professionals have earned significant power to name their price, prompting significant salary increases. Buckling under the pressures of this employee’s market, cyber staff has now become some of the best paid in the industry.
- Cybersecurity recruiters have reported a 40% pay rise for cyber staff.
- Insurance executives have indicated that salaries have increased by a maximum of 35% in the Excess & Surplus market (in which cyber liability policies are offered).
But our own research suggests that, in some cases, the percentage differences could be significantly higher. For example, statistics on Glassdoor indicate that cyber insurance broker salaries are up to 240% higher than those earned by brokers in Property and Casualty insurance in the UK and US. Similarly, cyber insurance underwriters reportedly cashing in between 120% to 180% more per annum than their Property and Casualty counterparts. To put this in greater perspective:
- The average insurance broker’s salary in the US totals $67,654. That’s 28% lower than the average cyber insurance broker’s salary, which is $93,992.
- UK insurance brokers, who earn £31,827 on average, make an annual salary that is 34% less than their cyber insurance peers, who earn an average of £47,717.
- The average insurance underwriter’s salary in the US is $82,195, 27% lower than the average cyber insurance underwriter’s salary, which is $112,500.
- Shockingly, the average insurance underwriter’s salary in the UK is 47% lower than that of a cyber insurance underwriter: the total industry average is £32,699 whilst the cyber insurance average is £61,498.
Training and Continuing Professional Development
Those positions which are entry and mid-level enable employers to recruit with maximum flexibility, as such roles often do not require specific security-related certification and enable a wider range of candidates to apply without needing to meet their demands for higher salaries. Mass recruitment drives of recent graduates may therefore make up part of the solution, as this will cement the creation of the next generation of cyber insurance professionals.
However, these recruitment pipelines will not be enough: both employers and employees will need to ensure that their cybersecurity knowledge is kept up to date in order to remain competitive and profitable in the fast-paced cyber insurance industry. The most ironclad remedy for futureproofing cyber insurance businesses against the talent shortage is, therefore, greater investment in education and professional development. Insurance firms with a long-term view to the future have already recognized that the recruitment and retention of top talent depend on a sustained commitment to educating and developing their employees.
For employees and candidates looking for employment, the substantial financial rewards to be reaped in a career in cyber insurance should not be underestimated. But the cyber insurance industry is in desperate need of education to remedy its severe academic deficit. Now is the time to invest in upskilling, especially in an industry that is hungry for talent and prepared to pay for it accordingly.