Demand for cyber coverage in Europe will grow sharply as the EU prepares to enforce data protection laws in May next year, according to Aon.

Major brokers are already helping clients assess their cyber exposure and determine if they need to enhance coverage under the European Global Data Protection Regulation (GDPR).

They are also working with insurers to tailor products.

“The upcoming GDPR… is expected to be a catalyst for accelerated growth,” Aon’s Global Cyber Market Overview says.

“All companies doing business with clients and prospects in the EU will need to comply with the new legislation. It will require companies to notify the regulator and individuals in the event of a breach of personally identifiable data.”

Companies that fail to comply could be fined up to 2% or 4% of their global revenue, depending on their business activity and subject to monetary caps.

Europe’s standalone cyber market generated gross written premium of $US135 million ($171 million) in 2015, well behind the US market’s $US1.5 billion ($1.9 billion).

Aon expects competition in the global cyber-insurance market to intensify as more carriers seek to meet growing demand.

“The world is continuing its digital transformation with no sign of slowing down,” the report says. “Insurers that are trying to grow in this segment are actively developing their strategies.

“Many are investing in new capabilities, establishing partnerships with cyber-security companies and hiring experts outside the industry to build a competitive edge.”