An increase in the occurrence of ransomware attacks during 2019 was felt across the US cyber insurance market as a whole, with the small commercial segment bearing the brunt, resulting in a loss ratio increase of 10%. Despite this, it was still a profitable year for the sector.

This is according to the fifth annual US Cyber Market Update from Aon, whose Profits and Performance report analyses 192 US insurers that reported direct cyber premiums to the National Association of Insurance Commissioners in 2019 – up from 184 insurers in 2018.

Premiums grew to US$2.26bn in 2019, an 11% increase on the previous year. Ninety insurers wrote more than US$1m and 41 wrote more than US$5m. Overall, the top 10 cyber insurers accounted for 69% of direct written premium, slightly down from 70% last year.

Jon Laux, head of cyber analytics for Reinsurance Solutions at Aon, commented, “Although ransomware has been on the rise for years, it was 2019 when the insurance industry felt the impacts far and wide. Unlike the NotPetya claims of 2017, these losses were not limited to a few large multinationals but were spread across companies of all sizes, and especially affected the small commercial segment. We expect that ransomware will be the main claims story of 2020 as well.”

“For years now, the thesis of cyber insurance has been that risk mitigation and risk transfer belong together – that insurers can help companies that suffer from cyber attacks to get back on their feet while working to reduce cyber attack frequency and severity through more effective risk controls. We believe that the next several years may finally see this come to fruition with insurers helping improve cyber security hygiene and reduce the cost of cyber attacks.”

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