Cyber insurance direct written premium volume for the property& casualty (P&C) industry grew by 35% in 2016 to $1.35billion, according to "Cyber Insurance Market Share andPerformance," a new reportfrom Fitch Ratings.
|Cyber exposure
Fitch notes that the $1.35 billion figure likely underestimatesthe industry's cyber premium exposure as there are inherentchallenges to breaking out cyber-related premium from othercoverages in multi-line coverage products.
|Related: Company cyberinsurance — the supply chaindilemma
|"Take-up rates for cyber insurance are increasing with frequentreports of computer hackingincidents, including: network intrusions and datatheft, as well as high-profile ransomware attacks that are leadingcorporations to search for broader insurance protection againstcyber threats," said Jim Auden, managing director, FitchRatings.
|Largest cyber writers
The largest cyber insurance writers areAmerican International Group,Inc., XL Group Ltd, and ChubbLimited. These companies had a combined market share ofapproximately 40% at year-end 2016. The top 15 writers of cyberheld approximately 83% of the market in 2016. However, over 130distinct insurance organizations reported writing cyber premiumsfor the year.
|The industry statutory direct loss ratio for stand-alone cyberinsurance improved in 2016 to 45% from 50% a year earlier. However,the ultimate profitability of the P&C industry's cyberinsurance efforts will take some time to assess as the marketmatures and future cyber-related loss events emerge.
|Related: 5 cybersecurity problems facing mid-size insurancecompanies
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