COPENHAGEN (Reuters) - Danish insurance company Tryg (TRYG.CO) has seen a rapid rise in sales of cyber insurance after last month’s ransomware attack and said this product could become as common as fire insurance for businesses.
Tryg, which reported stronger than expected second-quarter results on Tuesday, sold 2,800 cyber insurance policies in the quarter, up from 700 between January and March.
The rapid rise in demand was prompted by the ransomware attack, named “Wannacry”, that infected more than 300,000 computers in May and last month’s global cyber attack that hit across Russia, Ukraine and multinational firms.
“We think that for both big and small businesses it will become just as normal to have a cyber insurance as it is to have a fire insurance,” chief executive Morten Hubbe told Reuters in an interview.
With cyber insurance still a relatively new business that also poses risks for insurers, Hubbe said Tryg planned to gradually develop new cyber insurance products to adjust policies to the client’s needs rather than launching an all-inclusive product from the beginning.
“This is virgin territory both for us and our clients,” he said, noting that he expected this business segment to grow the next five years.
Tryg’s shares rose 3.6 percent, making it one of the biggest gainers on the pan-European STOXX 600 , after the profit beat.
Hubbe said the company was looking for opportunities to grow its cyber business through acquisitions, but had yet to spot obvious targets.
Tryg produced premium growth of 2 percent in local currencies over the quarter, the strongest growth in five years.
“After a few difficult years we now see that our Danish business is doing well as the economy is gaining traction,” Hubbe said.
“The opposite is happening in Norway, where the fall in oil prices is impacting the Norwegian market negatively. Unemployment is rising a little, which means there are less employees and cars to insure,” he said.
($1 = 6.5298 Danish crowns)
Reporting by Jacob Gronholt-Pedersen. Editing by Jane Merriman