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What is stalling the growth of the patent insurance market?

23rd April 2019 | Comments Off on What is stalling the growth of the patent insurance market?

This is the title of a recent article in the Spring 2019 issue of InsuranceERM.

It does an excellent job of asking the question why?

  • Why do so many SMEs not insure against the risk of being sued for patent infringement?
  • Why has patent insurance historically been so expensive?
  • Why have there been so many claims against such a small number of policies?

Nigel Swycher, Aistemos CEO is extensively quoted in this article making two significant points. First, the market is huge. Even if only 1% of SMEs face material IP risk, that would be a market of over 500,000 potential policy holders. Secondly, strategic patent intelligence has the potential to unlock both the demand and supply.


“ Rating IP insurance premiums requires an objective and reliable view of who own’s what patent assets and a good understanding of the litigation landscape. This information is now more accessible than ever and has been used to help underwrite IP risk for a number of years” said Nigel.


The article includes some interesting facts and figures around the risk of being struck by lightning and the risk of domestic burglary. Both are higher risk than IP infringement, but readily available at low cost. That makes for an interesting discussion of why the market isn’t growing more quickly.


However, the IP insurance market has yet to capitalise on this market potential. The article concludes that “this failure has largely resulted from high client-search costs, an ineffective sales force for this product and poor pricing and capital strategies by the patent insurers.”


Whatever the causes, this is an untapped opportunity for the insurance sector.

Read the full article here.

Nigel Swycher will be presenting at the CFC Broker Summit, on May 23 in Chicago “IP, the next Cyber?”