Companies

Incredibly, over 180 insurer groups were underwriting cyber risks by the end of 2021

Image
  • Globally, over 180 insurer groups were underwriting cyber risks by the end of 2021
  • worldwide GDPW amounted to around USD 8.6 billion with the top 20 groups in the sector accounting for almost 77% of this value
  • several factors point to a continuing upward trajectory for cyber insurance albeit recent growth rates are unlikely to be sustainable

London, 16th May 2022

As an extension of its rankings of insurance providers worldwide, and based in part on guidance from some of the largest underwriters in the sector, Insuramore has completed a global ranking of insurer (carrier) groups as measured by cyber insurance gross direct premiums written (GDPW) in 2021 (see www.insuramore.com/rankings/insurers/premiums-cyber).

This analysis indicates that GDPW for cyber insurance can be estimated globally at around USD 8.61 billion in 2021 rising to almost USD 9 billion if captive insurers are also included, and with the US alone likely to make up over a half of the total. With regards to the competitive structure of the market, it shows that the top 20 groups for this class are likely to have accounted for almost 77% of premiums worldwide and the top 100 groups for over 98%. Beazley and Chubb are likely to have been the global market leaders by GDPW, followed by Munich Re, Fairfax Financial Holdings and AXA.

The relatively new and specialized nature of cyber cover plus its geographic skew to the US make it a more concentrated sector than most other categories of insurance. For instance, the equivalent percentages (in 2020) for the top 20 and top 100 groups in total commercial P&C insurance worldwide were 40% and 70%, respectively, while for auto (motor) insurance they were a respective 47% and 71%. However, due to high rates of ceded reinsurance and, to a lesser extent, securitization of cyber risks, the apparent concentration of GDPW is, of course, only a partial indicator of where insured cyber risks ultimately lie.

Overall, the research established that over 180 insurer groups were underwriting cyber risks on a direct basis by the end of 2021 including over a half of the world’s top 250 groups by total P&C (non-life) GDPW. Several significant insurer groups that were not underwriting cyber risks themselves were found to act as distribution partners for it. For instance, as of May 2022, Progressive (ranked 8th globally by total P&C GDPW) was offering quotes from CyberPolicy, a trading name of CoverHound, an intermediary, while MATMUT (one of the largest mutual insurers in France) had a white-labelled offer backed by Chubb.

During 2022, and over and above pure demand for additional capacity in this risk category, the number of insurer groups underwriting cyber cover is likely to increase for several reasons:

  • demand for and penetration of cyber insurance may grow in countries in which it remains relatively under-developed, such as in the Asia-Pacific region, thereby attracting local market entrants;
  • there is potential for cyber cover to be marketed more actively to private customers, perhaps on an embedded basis within home insurance or cyber security software, or as an enhancement to high-end credit cards or bank accounts, or even as an employee benefit;
  • several MGAs with a focus on cyber insurance (e.g. Coalition, Cowbell Cyber, Resilience) have been setting up their own carriers with a view to potentially retaining a proportion of risk themselves, joining a few other MGAs (e.g. CFC Group) that have already taken this step.

On the other hand, trying to precisely forecast the growth of the global cyber insurance market beyond the next year or two is problematic as the explosive growth witnessed in 2021 and the first half of 2022 is unlikely to be sustainable. Nevertheless, it seems certain to remain on a strong upward trajectory.

Trending
Share this Post:
Posted by IRL Editor

Advertisement

ad ad

Related articles

Patrick Rastiello joins Ardonagh Specialty to lead North America Reinsurance expansion

Ardonagh Specialty has appointed Patrick Rastiello as CEO* of its North American reinsurance operations.   Patrick will be responsible for building Ardonagh Specialty’s US reinsurance...

Global Markets Overview: February 2024

In this Global Markets Overview, we explore our global outlook and share what we think it means for 2024.  https://www.wtwco.com/en-gb/insights/campaigns/global-markets-overview As...

EAMONN CUNNINGHAM WINS RIMS HARRY & DOROTHY GOODELL AWARD

Risk Management Trailblazer Presented with RIMS Highest Honor for Lifetime Achievement in Risk Management  NEW YORK (February 13, 2024) – At the RIMS New Zealand and Pacific Island...

Insurer’s Lease More Than Doubles Its Chicago Office Space

Sompo International Plans Move to 46-Story Tower at 155 N. Wacker A global specialty insurance provider is more than doubling the size of its Chicago office in a move a few blocks north, bucking the trend...

Haynes and Boone, LLP is pleased to announce that Peter A. Halprin has joined the firm as a Partner

Haynes and Boone, LLP is pleased to welcome Insurance Recovery Partner Peter A. Halprin to the firm’s New York City office. A Chambers USA-ranked attorney, Peter joins from Pasich LLP, where...

LIO Specialty Launches Revolutionary Online Portal for Life Science Insurance Solutions

Leading the Excess and Surplus Lines Market with Innovative Coverage for Cannabis and Nutraceutical Industries  West Conshohocken, PA– LIO Specialty Insurance Company proudly announces the launch...