Global standalone cyber insurance premiums reached $1.7bn in 2015 in a market still in its infancy, according to a study conducted by Aon.

In its Global Cyber Market Overview report published earlier this week, Aon noted that the cyber insurance market has boomed in recent years, citing annual premium growth rates of around 30 percent between 2011 and 2015.

Furthermore, the broker estimated 2016 global standalone cyber premiums to be c.$2.3bn as data pointed to higher growth rates last year.

The report estimated that the US accounted for c.90 percent or $1.5bn of total gross written premiums in 2015, of which more than 60 percent was written by the five largest insurers.

Meanwhile, Lloyd’s carriers accounted for 30 percent of US cyber premium in 2015.

The broker said that growth in the US had been fuelled by several factors including the introduction and enactment of data breach legislation in 47 states, a growing awareness of cyber threats and the increasing number and rising cost of data breaches.

The report highlighted that demand in recent years has been driven by large corporations storing personally identifiable information and processing vast quantities of financial transactions such as large retailers, with these clients representing nearly half of US standalone cyber premium.

Healthcare was also noted as a growth segment, accounting for around 15 percent of the US market, as companies increase their purchasing appetite in response to legislation.

In contrast, the European standalone cyber market was sized at $135mn in 2015.

However, it is anticipated that the upcoming Global Data Protection Regulation (GDPR) - which comes into force next May - will catalyse a growth in demand for cyber cover in the region as companies will be obligated to notify the regulator and individuals in the event a breach of personally identifiable data, Aon said.

Meanwhile, it was estimated that global cyber reinsurance premiums hit c.$525mn in 2015, with approximately 95 percent written on a quota share basis.

The report noted that more than 15 reinsurers actively write standalone cyber treaties.

Longstanding supporters of the cyber reinsurance market have built their book over time and are able to offer 20 percent to 30 percent participation on quota share treaties, the broker said.

However, Aon highlighted that loss occurrence caps for business interruption exposure are often required on quota share treaties, as carriers remain conservative on their exposure to cyber risk.

While more recent entrants have shown a clear appetite to quote business, they remain cautious and are unwilling to take large lines and generally restrict their participation below 20 percent, the report noted.

The broker added that the development of the global cyber reinsurance market is being hindered by the current lack of suitable data and modelling capabilities to evaluate aggregate exposures, as well as a dearth of underwriting talent and expertise.