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Cyber security represents the main avenue of growth in damage insurance

by

Andrea Lubeck

27 June 2017 13:30

Photo : Stockvault.net

The cyber security sector will be among those that enjoy the best growth in damage insurance, while the number and severity of cyber attacks have increased over the past few years, reveals a report of the firm of rating A.M. Best.

In 2016, the direct premiums written totaled $ 1.3 billion ($G$), of which 67.9 per cent are of the autonomous police, and the rest part of a comprehensive coverage. The 20 largest insurers in this sector have underwritten a$ 1.2-billion of the total. Direct written premium increased by 34.7 % between 2015 and 2016.

A market of 7.5 G$ 20 G$ in 2020

By 2020, the total amount of hedges against cyber risks will be in the range between 7.5 billion and$ 20 G$. However, and despite the growth of direct written premiums between 2015 and 2016, A.M. Best warns that it is too early to determine whether these projections will materialize. «Though many signs point to a substantial growth in the sector, cybernetics, it remains to be seen whether the increased demand will be sustained beyond the craze noticed after each attack well-known,» said a senior analyst of the firm.

In addition, it maintains a degree of caution in the face of future growth, stating that the complexities of the coverage of cyber risks will ensure that only a few insurers will offer premiums.

A sector that is profitable

The cyber security sector turns out to be profitable for all insurers. In fact, the rate of direct loss decreased by 9.6 %, from 51.4% in 2015 to 46.9% in 2016, this loss is paid for the autonomous police have increased from 19.5% in 2015 to 24.3 % in 2016 and 15.7% in 2015 to 21.8% in 2016 for the fonts overall compared to direct premiums written.

A.M. Best reports that the majority of claims are related to attacks of type » rançongiciel «, where a person blocks the data of the computer and demand a ransom to make them available again. In almost all cases, the losses do not exceed the deductible and recovery of previous backup has helped to reduce the negative long-term effects of the attack.

Most of the autonomous police

The firm sees good eye the change of fonts comprehensive autonomous, since they provide reductions of costs and expenses for the disputed claims at issue, in addition to allow you to write fonts with a language that is more specific and focused on the types of attacks prevalent.

Moreover, this transition to the autonomous police could allow insurers to develop better methods of pricing and provisioning, leading ultimately to improvements in modeling tools and a better understanding of the aggregation of risks.

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