Direct premiums written in the US cyber insurance market grew by 11% annually in 2019 to $2.25 billion – but the rate of growth slowed from the previous year, marking the fourth straight year of slowdowns, according to a new A.M. Best report.
In the new Best’s Market Segment Report, “Cyber Insurance: Profitability Less Certain as New Risks Emerge”, the ratings agency found that growth has slowed significantly from 2016-2017, when direct written premiums grew by more than 30% year over year.
In the years since, the cyber threat landscape has expanded and awareness of cybersecurity issues has increased, AM Best said.
“Protracted litigation has demonstrated that cyberattacks have a longer tail than expected, underscoring the importance of managing so-called silent cyber,” A.M. Best said. “Additionally, the frequency and severity of ransomware attacks have escalated, as have data breached and kidnaps in the health care industry.”
Highlights from the report include:
The report emphasized that A.M. Best’s market figures were likely understated “given the lack of standardization in cyber policies and reporting, as well as a considerable usage of captive and surplus lines insurers to write cyber coverage.”
