Despite robust underwriting profits, U.S. cyber insurance market faces stagnation in premium volume due to pricing pressure and evolving cyber risk landscape, according to Fitch Ratings.
The U.S. cyber insurance market saw robust underwriting profits for the second consecutive year in 2023, but written premium volume stagnated due to renewed pricing pressure, according to a report by Fitch Ratings.
The report indicates that despite two underperforming years in 2020 and 2021, the direct incurred loss and defense and cost containment (DCC) expense ratio for standalone cyber coverage remained relatively steady at 44% in 2023, compared to 43% in 2022. This ratio has averaged a profitable 48% over the nine years that cyber supplemental data has been available.
These favorable cyber underwriting results are partly attributed to prior large increases in premium rates and insurers’ increased vigilance in cyber risk selection and underwriting. Insurers are now demanding that customers maintain proper cyber hygiene and risk management practices before agreeing to insure them, and are…
