Cyber Insurance Report Confirms Continued Market Growth
The cyber insurance market continued to grow in 2018, with premiums increasing by 12.6% for both standalone and packaged policies, according to data from the National Association of Insurance Commissioners’ (NAIC) Cybersecurity and Identity Theft Insurance Coverage Supplement. Direct written premium totals reached $2.03 billion in 2018, which more than doubles the $996 million recorded in 2015.
A market segment report published by A.M. Best Company states that cyber growth is being driven by businesses aiming to minimize cyber and reputational risks, while protecting their balance sheets and bottom lines. Additionally, stricter regulatory environments, such as the General Data Protection Regulation in Europe and state-based regulations in the US, are driving growth.
In the US, the top five cyber writers in 2018 were Chubb, AXA US, AIG, Travelers, and Beazley, which together accounted for more than half of the total market share. The top five insurers by policies in force were Hartford, Liberty Mutual, Farmers, Cincinnati, and Berkshire Hathaway, with a combined 1.2 million policies. At year-end 2018, 2.9 million cyber insurance policies were in force, up from 2.6 million in 2017.
According to the report, the biggest challenge for cyber insurers is managing new risks that arise from emerging technologies. As exposure to cyber risk grows, the demand for cyber insurance will also expand. The number of market participants has grown to match rising premium totals, and new market entrants are expected to contribute to increased capacity.