Protection from the effects of cyberattacks is set to be big business for Bermuda, an expert in the field said yesterday.

Giles Harlow, vice-president for professional risk solutions at insurance and reinsurance brokers Aon Bermuda, said: “We think it’s the largest growing single line of business in the last 20 years in terms of insurance lines.

“I can’t speak for everyone, but we saw 150 per cent growth last year for Aon in Bermuda.

“Clients want to be first-time purchasers — they see the need to buy it and the Bermuda marketplace has had a lot of new entrants who have been writing this.”

Mr Harlow was speaking after a Thursday discussion at the Royal Hamilton Amateur Dinghy Club, run as part of the Government’s Department of E-Commerce’s Techtalk series and backed by IT security organisation ISACA and the Technology Leadership Forum.

Mr Harlow was joined on the panel for the event by Noel Pearman of XL Catlin, and Sarah Spurling of Endurance, both of whom are vice-presidents for professional lines, and David Friston, senior vice-president, financial lines manager, for AIG Bermuda. Mr Pearman and Ms Spurling joined Mr Harlow and Victoria Edmonds of Markel Global Insurance for a recent special course on cybersecurity at the prestige Massachusetts Institute of Technology in Boston.

Mr Harlow said that — while large-scale hacks at major companies like Target attracted a lot of publicity, they were relatively rare, but that small- and medium-sized businesses, which often lacked sophisticated cyberattack recovery plans, were suffering cyberattacks at an increasing rate.

He added: “The ransomware attacks, we’re seeing a lot more of those. They aren’t huge, but they are much more worrisome for the small- to medium-sized sector, who aren’t necessarily backed up, so they are vulnerable to this.”

Mr Harlow added that statistics showed that 78 per cent of small- to medium-sized businesses who suffered significant cyberattacks went out of business within two years.

He said that the industry had models stretching back decades for most risks, but that cybercrime was a relatively new problem, which made it more difficult to predict risk.

Mr Harlow added: “Aon has built up a very good sense of what these costs are for network business interruption event expenses, but what is very difficult to build a good picture of is the liability part of the policy. The legal framework is still evolving, so that’s very difficult to quantify.

“There is also a currently uninsurable element with things like reputational loss.”

Mr Harlow said: “There are issues we are going to have to work through with the market and our clients to make sure this is done in a sustainable way going forward.”

He added that Bermuda was not immune to remote attacks.

He said: “It depends what they are after — if they are after credit-card information, it’s a small-target market. In terms of the physical transfer of assets, as opposed to breaching data, there is a large exposure.”