Cyber Insurance Grew 35% in 2016
According to reports by A.M. Best and Fitch, property and casualty insurers wrote $1.35 billion in direct written premium for cyber insurance in 2016, a 35 percent jump from 2015. The reports indicate that the largest writers of cyber insurance are Chubb, XL Group, and American International Group, and these companies had a combined market share of approximately 40 percent at year-end 2016. The top 15 writers of cyber held approximately 83 percent of the market in 2016. There were more than 130 insurance organizations writing cyber premiums last year. READ: Cyber Line Expected to be One of the Leading P/C Growth Areas Overall, cyber insurance was profitable; the direct loss ratio decreased from 51.4 percent in 2015 to 46.9 percent in 2016. A.M. Best attributed the decline to the majority of reported cyberattacks being related to ransomware heists, on which losses were well below the deductibles and a simple backup recovery worked to prevent negative long-term effects. A.M. Best also noted that top insurers are writing standalone coverage and are shifting away from packaged policies by nearly a 70-30 split on the $1.3 billion of total direct premiums written in 2016.