BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Cyber underwriting profitability varies by segment: Report

Cyber underwriting profitability varies by segment: Report

Cyber underwriting profitability varies by insurance segment, says a Keefe Bruyette & Woods Inc. report issued Friday.

Professional liability lines, including cyber coverage, are reporting loss ratios of about 115%, according to the report by the New York-based investment banking firm. The report said about $1.5 billion of the $3.25 billion in current cyber premiums are within professional liability coverages.

In contrast, large-account stand-alone cyber coverages are reporting loss ratios of 40% to 50% and middle market accounts, those of firms with revenues of less than $1 billion, are reporting loss ratios of 10% to 20%.

“Smaller accounts’ low loss ratios reflect the fact that 80% of cyber incidents cost less than $1 million, while only 5% cost more than $20 million,” said the report.

The report said also that smaller account, stand-alone cyber’s very strong underwriting profitability is driving rates down by about 10%, and there are often higher limits.

The report said industrywide, 2018 gross written cyber premium growth should be about 20% to 25%, which is in line with recent year’s growth rates, and is expected to continue at least through 2020.

Fewer than 20% of commercial insureds buy cyber coverage, “implying significant growth potential through increasing penetration,” the report said.

The report said also that policy forms are slowly being standardized.




Read Next

  • ILS to back cyber underwriting as risk models mature: PwC

    U.K.-based consultancy firm PricewaterhouseCoopers International Ltd. expects an increasing amount of insurance-linked securities capacity to back the cyber underwriting market as the technologies and risk models used to quantify exposures mature, reports. A survey by PwC found that 75% of insurers are utilizing reinsurance capacity to manage the growth of their cyber exposures. The survey found that nearly 40% of the insurers are passing on at least 50% of their cyber exposures to reinsurance capital.