Analysts at Fitch Ratings have said, that cyber insurance has become the fastest growing segment for US property & casualty (P&C) insurers as evolving threats have “boosted” the demand for coverage, with insurers actively raising prices in response to rising claims.
In the analysts latest report on the US cyber insurance market, it addresses how cyber incidents have continued to grow rapidly amid widespread expansion of ransomware events in the last two years.
Cyber supplement data from the report shows that the number of claims reported increased by 100% in the past three years, and claims closed with payment grew by 200% annually over the same period, with 8,100 claims paid in 2021.
At the same time, premium rates for cyber coverage “skyrocketed” in 2021 in response to expansion of claims activity and cyber incidents, with prices increasing at a considerably higher pace than other commercial business lines.
It was recently reported that cyber insurance direct written premiums grew by 74% in 2021, to nearly $5 billion, according to statutory financial data from the Cybersecurity and Identity Theft Insurance Coverage Supplement.
The report also stated that premium for standalone coverage increased by 92% to over $3.1 billion for the year.
Furthermore, rapid premium growth was reported by several newer participants in 2021 within the US cyber insurance market. The report states that the top 10 writers hold 57% market share in 2021, compared to 67% from the previous year.
The report says that the top three US cyber writers are Chubb Limited, with 10% direct market share, down from 15% in 2020, Fairfax Financial Holdings Limited (FFH) with 9%, and AXA XL with 9%.
In addition, the industry statutory direct loss plus defence and cost containment (DCC) ratio for standalone cyber insurance dropped to 65% in 2021 from 72% in 2020, but remains well above the 42% average loss ratio for 2015-2019.