Cyber insurance premiums have soared over the past year as high-profile incidents have continually kept cyber risks front and center, according to new research.
Spending on standalone cyber insurance coverage rose 92% to more than $3100 billion for the year in the United States, according to statistics compiled by analysts at Fitch Ratings.
The research found that cyber insurance prices have grown at a significantly higher rate than other commercial lines of business and that cyber insurance is now the fastest growing segment for US property and casualty insurers.
Why does the price go up?
Fitch attributed the increase in insurance premiums to an increase in the number of cyberattacks.
Fitch data revealed that the number of cyber insurance claims increased 100% in the last three years and 8100 total claims were paid in 2021, a 200% increase year over year.
Meanwhile, direct spend on written premiums on cyber insurance grew by 74% in 2021, to almost €5 billion according to the statistics.
However, the fast-growing market is still under the control of a few select players.
The top ten cyber insurance underwriters controlled 57% of the market share in the United States in 2021, up from 67% the previous year.
Chubb Limited had 10% of the market share, while Fairfax Financial Holdings Limited (FFH) and AXA XL had 10% and 9%, respectively.
It's no surprise that cyber insurance premiums are on the rise, with 2021 cyber attacks like the Colonial Pipeline incident showing the potential for cyber attacks to wreak large-scale havoc beyond the boundaries of your targeted business.
According to a report by cybersecurity company Sophos, two-thirds (66%) of midsize businesses around the world experienced a ransomware attack last year, up from 37% the year before.
Insurers themselves are not immune to the threat.
AON, a British-American multinational that sells financial risk mitigation solutions, revealed that it had been the victim of a ransomware attack.