Cyber insurance direct written premiums in US grew by 74% in 2021 to over $4.8 bil., according to statutory financial data from the “Cybersecurity and Identity Theft Insurance Coverage Supplement.” Premiums for standalone coverage increased by 92% to over $3.1 billion for the year
The industry statutory direct loss plus defense and cost containment (DCC) ratio for standalone cyber insurance dropped to 65% in 2021 from 72% in 2020 but remains well above the 42% average loss ratio for 2015-2019
Chicago/New York:
Cyber insurance has become the fastest growing segment for U.S. property/casualty (P/C) insurers as evolving threats have boosted demand for coverage, with insurers actively raising prices in response to rising claims, Fitch Ratings said.
Cyber incidents continue to grow rapidly amid widespread proliferation of ransomware events. Cyber supplement data show reported claims rose by 100% annually in the past three years. Claims closed with payment grew by 200% annually over the same period, with 8,100 claims paid in 2021.
Premium rates for cyber coverage skyrocketed in 2021 in response to expansion of claims activity and cyber incidents, with prices increasing at a pace considerably higher than other commercial business lines.
Cyber insurance direct written premiums grew by 74% in 2021 to over $4.8 billion, according to statutory financial data from the “Cybersecurity and Identity Theft Insurance Coverage Supplement.” Premiums for standalone coverage increased by 92% to over $3.1 billion for the year.
The industry statutory direct loss plus defense and cost containment (DCC) ratio for standalone cyber insurance dropped to 65% in 2021 from 72% in 2020 but remains well above the 42% average loss ratio for 2015-2019.
Improvement in results seemingly contradicts information regarding growth in cyber events from market experts and the broad shift in market pricing and underwriting terms.
This difference in part reflects limitations in the data provided in cyber supplemental filings as direct premium and loss data provided does not fully include all related underwriting and claims expenses or effects of ceded reinsurance on results.
Incurred loss data are disclosed for standalone business only with more limited information on package business, which creates challenges in assessing segment underwriting performance.
Also, while coverage take-up rates are increasing, a large portion of cyber risk exposures are not insured.