Insurance Journal’s Top 10 Cyber Insurance Stories of 2019
An A.M. Best report released in June gave a comprehensive look at the state of the cyber insurance market for 2018, the most recent year data was available, stating that it has seen continued growth and underwriting performance in this line of business.
In fact, the report said direct premiums written for both standalone and packaged cyber policies grew about 12 percent in 2018 from $1.8 billion to $2.0 billion. It stated the growth was a bit of a slowdown from a growth rate of 30 percent for the previous two years, however the $2.0 billion in DPW is more than double what was written in 2015. Additionally, 528 U.S. insurers reported writing cyber insurance in 2018, up from 471 in 2017.
The A.M. Best report, “Cyber Insurers Are Profitable Today, but Wary of Tomorrow’s Risks,” noted that total claims grew 39% in 2018 compared to 2017, which it said reflects a changing market with more SMEs buying coverage. In 2018, there were more than 12 million first-party claims for costs associated with breach notifications, credit monitoring for customers and business interruption.
A.M. Best also identified the top five cyber insurers by DPW, the top cyber writers in terms of policies in force, as well as market challenges for the cyber insurance space in its state of the cyber insurance market report, which served as Insurance Journal’s top cyber insurance news for 2019.
Check out Insurance Journal’s additional top 10 cyber insurance stories for 2019 based on reader metrics below:
In May, Bloomberg reported that cyber risks will soon become bigger risks than natural catastrophes for the insurance sector, according to Scor Chairman and Chief Executive Officer Denis Kessler, who recommended the industry build a comprehensive, common global scale to assess cyber-related incidents.
“I dream of a kind of Richter scale for cyber security,” Kessler said at a conference on cybersecurity held at the Bank of France, referring to the scale used to measure earthquakes. “It would be very helpful to have measurement and modeling tools. Unless we can model, it’s very difficult for us to provide coverage. We have scenarios but not modeling tools.”
Bloomberg reported on the conference, in which cybersecurity experts and top executives in the financial sector as well as representatives from the European Central Bank, the Federal Reserve and the central banks of Canada and Japan convened in Paris to assess the risk.
The ransomware attacks on public entities in Texas, Florida, Maryland, Georgia and elsewhere in 2019 raised questions not only about paying ransoms but also about the role of insurance in helping these targets get back to serving the public, Insurance Journal reported in September. Whether to pay a ransom is a difficult decision and the negotiating skills that insurers bring to such situations represent just some of the expertise that cyber insurance can provide public entities faced with a ransomware incident, according to Tim Francis, enterprise cyber lead at Travelers. In a wide-ranging interview with Insurance Journal that took place before the August ransomware attack on 22 Texas cities, Francis discussed cyber insurance, ransomware and the circumstances facing municipalities.
Marsh issued a new report on the cyber market in April, titled More Cyber Insurance Buyers as Awareness Grows. The report indicated the message about the need to take cyber risk and insurance seriously is getting through to companies and boardrooms, as it stated the estimated cyber insurance market increased to $1.8 billion in 2018, three times what it was in 2015.
“As risk awareness has grown, more organizations, particularly those focused on their business interruption risk, are turning to the cyber insurance market for protection,” according to Tom Reagan, U.S. Cyber Practice Leader for global insurance broker Marsh.
Given the increasing frequency of cyber breaches, along with the presence of more varied and evolving threats, there is growing uncertainty about the ability of the cybersecurity industry to protect its customers, according to Asaf Lifshitz, CEO and Co-Founder of Sayata Labs, in an article published on Insurance Journal after originally publishing in Insurance Journal’s sister publication, Carrier Management. In the article, Lifshitz states there is virtually no company that isn’t a potential target for a cyber attack, from mom-and-pop storefronts to Fortune 500 companies. Even with the best possible cybersecurity posture, there is always a threat of a breach, he says.
In an Insurance Journal viewpoint column published in July, Josh Ladeau, the global head of cyber and tech errors and
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