The cyber security market is growing at considerable pace with online crime rates doubling in Ireland in 2014.

A newly published report by Pricewaterhouse Coopers (PwC) estimates the global value of the insurance market in the sector could reach $5 billion (€4.4 billion) in annual premiums by 2018 and rise to as much as $7.5 billion (€6.6 billion) by the end of the decade.

Its research found 61 per cent of business leaders across all industries see cyber attacks as a threat to the growth of companies. Last year alone, there was an average of 100,000 security incidents every day.

An Ireland-specific survey for 2014 found such incidents had nearly doubled with 62 per cent of business leaders expecting them to increase further by the end of next year.

The developing nature of the problem is providing challenges for the insurance industry, identified and explored in its report: “Insurance 2020 & beyond: Reaping the dividends of cyber resilience”.

“As boards become increasingly focused on the need for safeguards against the most damaging cyber attacks, insurers will find their clients questioning how much real value is offered in their current policies,” said Padraic Joyce, a partner at PwC.

“If insurers continue to simply rely on tight blanket policy restrictions and conservative pricing strategies to cushion the uncertainty, they are at serious risk of missing this rare market opportunity to secure high margins in a soft market.”

In order to embrace the developments, PwC said insurers should “robustly model” exposure and loss scenarios, identify systemic risk and partner with technology companies and intelligence agencies to “develop a holistic and effective risk evaluation, screening and pricing process”.

Data sharing between insurers and a combined effort to coordinate risk management would also be of value, it said.