Cyber insurance premiums up almost 35% in 2016: A.M. Best
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There was a total of $1.34 billion in cyber direct premiums written in 2016, a 34.7% increase from 2015, A.M. Best Co. Inc. said in a special report dated Thursday.
Of the $1.34 billion, 67.9% was written on a stand-alone basis, with the balance reported as packaged policies, according to the report by the Oldwick, New Jersey-based rating agency, “Cyber Line Expected to Be One of the Leading P/C Growth Areas.”
“Comparing 2016 data with 2015, one of the key takeaways is that the top cyber policy writers have shifted from packaged policies to stand-alone policies, or have more accurately filled out” the National Association of Insurance Commissioners’ Cybersecurity and Identity Theft Insurance Coverage Supplement, which was introduced at year-end 2015.
The largest cyber insurance underwriter was New York-based American International Group Inc., with $228.3 million in 2016 direct premiums written, according to the report, all of it stand-alone.
The report says while cyber coverages have been estimated to increase to $7.5 billion to $20 billion by 2020, “it is too early to determine if these growth projections will come to fruition. After every reported breach, the demand for coverage increases, but the overarching question is whether its growth will be sustained.”
The report also says that while A.M. Best acknowledges the opportunities the coverage presents, “due to the uncertainty of this risk, companies need to be prudent in their underwriting practices and exercise appropriate risk management and mitigation measures.”
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