The cyber insurance market in the U.S. grew to roughly $4.1 billion in direct written premiums in 2020, an increase of 29.1% from the prior year, reports the National Association of Insurance Commissioners (NAIC).
According to the NAIC’s 2020 Cyber Insurance Report, insurers writing standalone cyber policies wrote approximately $2.58 billion in direct written premiums, and those writing cyber insurance as part of package policies wrote about $1.49 billion in direct written premiums.
The NAIC report says U.S. domiciled insurers writing cyber coverage reported $2.75 billion in direct written premium in 2020, an increase of 21.7% from 2019. That total of $2.75 billion accounts for 0.38% of the $727 billion property/casualty direct written premium in the U.S.
Chubb wrote more than $404 million in direct written premium in the space, leading the pack with a 14.7 percent market share. AXA, AIG, Travelers and Beazley rounded out the top five.
Alien surplus lines insurers wrote total written cyber insurance premium of $1.3 billion, indicating a total premium increase of 19.8%.
The top 20 groups in the cyber insurance market reported direct loss ratios in the range of 24.6% to 114.1%. The loss ratio for 2020 for the top 20 groups averaged 66.9%, up from 44.6% in 2019.
During 2020, the top 10 U.S. groups wrote almost 68% of the cyber insurance market. The top 20 U.S. groups writing standalone and package cyber insurance combined are listed in the table below. The figure below depicts the average loss ratios over the past four years.
Currently, cyber insurers are seeing their expenditures surpass 70% of premiums paid and thus it should be “no surprise that cyber insurance premiums are on the rise,” the report notes. NAIC said insurers’ price increases are likely to be reflected in the 2022 version of its cyber report.
NAIC noted that U.S. insurers’ most common product related to cybersecurity is identity theft coverage. Insurers wrote approximately 20.3 million policies, both standalone and package policies, up roughly 4% from the prior year. Currently, some homeowners policies include this coverage for no extra charge.
David Altmaier, NAIC president and Florida insurance commissioner, said cyber is one of the most important topics for the insurance sector and businesses today and the state regulators are working to monitor the market to help better address cyber risk.
*This story ran previously in our sister publication Insurance Journal.