While Cyber Threats Continue, Insurance Premiums Have Plateaued
A new cyber market update report, covering the cyber insurance industry’s 2023 performance by insurer Aon finds that premiums reported to the NAIC (National Association of Insurance Commissioners) decreased one percent in 2023 to $7.18 billion, driven by declining written premium per policy. The U.S. industry loss ratio reported to the NAIC decreased by three points to 42 percent for calendar year 2023.
“Increases in written premium per policy from 2022 continued to earn into portfolios in 2023; however, declining standalone written premium per policy creates headwinds for 2024.” Meanwhile, the standalone cyber market is becoming less concentrated according to Aon.
Most cyber claims are first-party, while third-party claims have been noted. Additionally, “In 2023, the cyber reinsurance market was bolstered with the introduction of catastrophe bonds,” the report specified.
“Cyber insurance continues to experience higher volatility compared to many common lines of business; however, there was less spread in industry loss ratios in 2023 compared to prior years,” the executive summary detailed.
“While U.S. premium reported to the NAIC did not grow in 2023, events like the July 2024 Crowdstrike incident demonstrate the need for cyber insurance,” the report acknowledged.
