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Total industry cyber direct written premium growth moderated to 8% in 2018 to $2.0 billion, compared with 37% growth in 2017, according to a report Tuesday from Fitch Ratings Inc.
Stand-alone cyber premium volume increased approximately 12% in 2018, Fitch said, adding “steady stand-alone premium growth reflects insureds’ interest in obtaining affirmative cyber coverage and dedicated limits for related exposures.”
Meanwhile, cyber coverage in commercial package policies grew by only 3% in 2018, compared with nearly 100% growth in 2018.
There was approximately $1.1 billion in cyber stand-alone direct premiums written in 2018, up almost 12% from 2017, Fitch said. The largest U.S. writers of stand-alone cyber coverage in 2018 were Axa XL, a division of Axa SA, with 23% market share and American International Group Inc. with 21% of stand-alone premiums, according to supplemental filings.
Travelers Cos. Inc., Beazley PLC and Zurich American Insurance Cos. round out the top five positions, data showed.
Market share remains “relatively concentrated” as the top 10 writers hold a 71% market share in 2018, according to insurer statutory financial data, Fitch said.
Chubb Ltd. continues as market leader for stand-alone and package cyber premiums combined with a 16.3% direct market share, followed by Axa XL, which moved up to second position with a 12.8% share, moving past third-ranked AIG at 11.6%.
Travelers and Beazley round out the top five at 7.3% and 5.5%, respectively.
The market is heating up, however, as “profitable results and underwriter attraction are promoting enhanced segment price competition,” Fitch said.
The ratings agency added that the number of U.S. insurers writing over $1 million of direct cyber premiums grew to 87 in 2018 from 75 a year earlier.
Fitch warned, however, that “current strong results in cyber contradict the considerable risk in this emerging product segment,” which has “limited historical claims and underwriting data,” adding that “insurers face challenges related to silent cyber exposures.”
Ireland-based Dooley Insurance Group said that local businesses are increasingly buying insurance against data breaches due to the European Union’s General Data Protection Regulation, The Irish Times reported. The insurance broker said that government agencies and big companies insist that organizations with which they do business have GDPR-related insurance. Companies that hold personal information face stiff fines for data breaches under the new rules.