Cyber insurance remained a fast-growing line in 2017, with package policy premium almost tripling, while standalone premium grew 7 percent*, NAIC data indicate.
Packaged cybersecurity policies as measured in quantified and estimated direct premiums written grew from $416.8 million in 2016 to $1.1 billion in 2017. The number of packaged claims made and occurrence policies in-force increased by 71 percent.
Standalone cybersecurity policies did not fare as well, with a 7 percent increase in direct premiums written from $920.7 million in 2016 to $985.6 million in 2017. The number of standalone occurrence policies in force fell by 12 percent, and the number of standalone cybersecurity claims-made policies fell by 33.3 percent. The loss ratio for 2017 standalone cybersecurity insurance was just 30 percent.
Over the past year, headline grabbing cyber incident such as the Equifax breach ensured that companies remained aware of the enormous potential losses cybersecurity threats pose to their businesses. Cyber incidents ranked second on Allianz’s 2018 list of top business risks (five years ago, it ranked 15th.).
A recent PwC report cautioned that given the increasingly frequent and severe nature of cyberattacks, it’s still unclear whether cyberrisks are adequately priced.
“The inevitable market-turning event will separate carriers that have sufficient risk management, underwriting processes and capital in place from ones that do not,” said the report.
*NAIC data sourced from S&P Market Intelligence on April 27, 2018.