By: Luke Jones, Published on June 23, 2017 08:42 PM, Last Update on June 24, 2017 05:45 AM
Fitch Ratings has issued a new report that shows cyber insurance is becoming increasingly popular, with direct written volume cyber coverage in the property and casualty (P&C) market growing by 35% during 2016.
The market increased to $1.35 billion, but Fitch points out that the increase means many experts have underestimated the exposure of cyber coverage.
“Take-up rates for cyber insurance are increasing with frequent reports of computer hacking incidents, including: network intrusions and data theft, as well as high-profile ransomware attacks that are leading corporations to search for broader insurance protection against cyber threats,” Jim Auden, managing director, Fitch Ratings, said in an article featured on Reuters’ website.
Other findings in the report show that industry wide statutory direct loss ratio for stand-alone cyber coverage has improved to 50%, up from 45% year-on-year. Fitch says the market is still maturing and true results for the P&C industry will not be fully seen for some time:
“Future growth in cyber premiums will likely come from more consistent policy terms and conditions as insurers gain better understanding of loss potential and coverage, better cyber underwriting models, as well as efforts to comply with increased cyber regulatory standards across numerous industries, particularly financial institutions,” Auden added.
The ratings company also detailed the largest current P&C cyber insurance providers. American International Group (AIG), XL Group Ltd, and Chubb Limited are the largest writers and has a combined US market share of around 40% by the close of last year.
Indeed, the overall cyber market is still being dominated by a select few. The top 15 writers took around 83% of the who market, Fitch reports.