Cyber insurance premiums have skyrocketed over the last year as high profile incidents have continually kept cyber risks in the stoplight, new research has claimed.
Spending on standalone cyber insurance coverage increased by 92% to over $3.1 billion for the year in the US, according to statistics collected by analysts at Fitch Ratings.
The research found that prices for cyber insurance grew at a considerably higher pace than it did for other commercial business lines and that cyber insurnace is now the fastest growing segment for US property and casualty (P&C) insurers.
Why the price jump?
Fitch attributed the rise in insurance premiums to a jump in the number of cyberattacks.
Fitch’s data found that the number of cyber insurance claims increased by 100% in the past three years, and that 8,100 claims were paid in total in 2021, a 200% year-on-year increase.
Meanwhile, spending on cyber insurance direct written premiums grew 74% in 2021, to reach almost $5 billion according to the statistics.
However, the fast growing market is still very much under the control of a few select players.
The top ten cyber insurance underwriters controlled 57% of the US market share in 2021, down from 67% in the previous year.
Chubb Limited held 10% of the market share, while Fairfax Financial Holdings Limited (FFH) and AXA XL held 10% and 9% respectively.
It’s no surprise that cyber insurance premiums are rising, with 2021 cyber-attacks such the Colonial Pipeline incident showing the potential of cyberattacks to cause widescale havoc beyond the boundaries of their target business.
According to a report from cybersecurity firm Sophos, two-thirds (66%) of mid-sized organizations worldwide suffered a ransomware attack last year, as compared with 37% the year prior.
Insurers themselves aren’t immune from the threat.