Cyber Policy Magazine

Cyber Policy Magazine

U.S. Cyber Insurance Industry Grows 35%; Loss Rates Improve

Cyber insurance direct written premium volume for the Property/Casualty (P/C) industry grew by 35% in 2016 to $1.35 billion, according to a new report from Fitch Ratings. For the second year in 2016, annual P/C insurer statutory financial statements include the Cybersecurity and Identity Theft Insurance Coverage Supplement, which provides helpful insights on cyber underwriting activity and performance for insurers. Fitch notes that the $1.35 billion figure likely underestimates the industry's cyber premium exposure as there are inherent challenges to breaking out cyber related premium from other coverages in multi-line coverage products.

PDF REPORT: Counting The Cost Cyber Exposure Decoded

The aim of this report is to provide insurers who write cyber coverage with realistic and plausible scenarios to help quantify cyber-risk aggregation. The understanding of cyber liability and risk exposures is relatively underdeveloped compared with other insurance classes. By understanding cyber risk exposure, insurers can improve their portfolio exposure management, set appropriate limits and gain the confidence to expand into this fast-growing insurance class.

Extreme Cyber-Attack Could Cost As Much As Superstorm Sandy

The report, “Counting the cost: Cyber exposure decoded”, reveals the potential economic impact of two scenarios: a malicious hack that takes down a cloud service provider with estimated losses of $53 billion, and attacks on computer operating systems run by a large number of businesses around the world which could cause losses of $28.7 billion.

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