In 2017, Chubb more than doubled its direct premiums written for US cybersecurity business to $284.4mn, leapfrogging AIG and XL Group.

In contrast to Chubb’s significant growth, AIG’s direct premiums written were effectively flat at $227.6mn, while XL’s was up 10.6 percent at $177.9mn.

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According to AM Best, the three leading writers dominate the market with respective shares of 16.0 percent, 12.8 percent and 10.0 percent.

The report also noted that most coverage remained in “packaged” policies – as part of a broader cover, typically for a larger national/multinational corporate buyer. For example, the vast majority of Chubb’s premium, 94.2 percent, was through packaged policies and only 5.8 percent in standalone.

In contrast, both AIG and XL now focus on separating out their cyber covers into separate policies, and this may explain why their “market share” has apparently shrunk.

Since 2015, US companies have been obliged to estimate the premium component for cyber coverage that is contained in packaged policies, but this does leave an amount of interpretation among companies that makes direct comparisons less reliable.

According to the rating agency, the 2017 data demonstrates that larger companies are increasingly aware of their cyber exposures and are often increasing their coverage bought with some limits now over half a billion dollars. But, in contrast, smaller/SME insurance buyers remain relatively reluctant buyers.

Nonetheless, AM Best noted that last year cyber packaged policies increased 28 percent.

“This increase is significant, but this is something of a fledgling business, and an increase of this magnitude, while material, does very little to close the protection gap” it said.

Indeed, cyber insurance remains very much a marginal revenue stream for US insurers despite the sector’s fast growth and future potential. According to AM Best, US P&C insurers wrote only $1.78bn in cyber cover, both standalone and packaged, last year.

Other surveys have also revealed that cyber pricing is under pressure, despite high profile and major cyber related insurance loss events such as Merck’s NotPetya virus which has been estimated at a $275mn insurance loss, while some estimates are even higher at over $1bn.

For example, a recent survey by the CIAB of its members, US brokers and agents, reported that 62 percent of its respondents felt premium prices generally fell in the last six months of 2017, despite notable losses such as Merck occurring in that time period.

Around 97 percent reported that capacity was either plentiful or increasing.

Broker Marsh also noted in its Global Insurance Market Index that US cyber prices declined in the first quarter of 2018, marking the fourth time in the last five quarters that prices have declined.

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