Aggregating the cybersecurity statutory supplement data for the U.S. property/casualty insurance industry, Fitch Ratings, Inc., has found that approximately 120 insurance groups reported writing cyber coverage in 2015 totaling approximately $1 billion in direct written premiums volume. Fitch Ratings analyzed cyber insurance market share and performance in a new special report, “U.S. Cyber Insurance Market Share and Performance,” that analyzed data from a new 2015 statutory supplement to compile company and industry statistics on cyber insurance.
The largest writers according to Fitch Ratings' analysis were American International Group, Inc. (“AIG”), accounting for approximately 22 percent of the market, Chubb Limited at 12 percent, and XL Group Ltd. at 11 percent.
Cyber-related insurance coverage represents a significant growth opportunity for P/C insurers. Insurance broker Marsh & McLennan Companies, Inc., estimated that in 2014 the global insurance market wrote approximately $2 billion in cyber insurance premiums, which could multiply by a magnitude of three to five times by 2020.
“Industry estimates suggest that the global cyber insurance business could increase to $20 billion by 2020, but the lack of information on cyber insurance is a challenge for insurance companies, policyholders, regulators, and investors to evaluate and price risk,” said James Auden, managing director of Fitch Ratings. “Challenges in isolating cyber related premiums and exposures from other risks within a package policy create limitations in analyzing the supplemental filing as total cyber insurance premiums are likely understated.”
Fitch Ratings noted that the property/casualty industry's direct loss ratio for cyber stand-alone business in 2015 was 65.2 percent.
“The ultimate profitability of the P/C industry's cyber insurance efforts will take some time to assess as the market matures and future cyber-related loss events emerge,” said Gerry Glombicki, director of Fitch Ratings.
Learn more: www.fitchratings.com.