Outlook for global cyber insurance segment stable: A.M. Best

A.M. Best Co. Inc. is assigning a stable outlook for the global cyber insurance segment, the ratings agency said in a report Monday.

The stable outlook is based on expected intermediate term profitability combined with improvements in underwriting practices and policy language, the report said.

Greater demand and improving cyber security hygiene among policyholders help bolster the segment.

A supportive reinsurance market and recent access to alternative risk transfer such as insurance-linked securities also help put cyber on stable footing, Best said.

In a separate report Monday, Best said cyber premium growth, according to filings from the National Association of Insurance Commissioners, increased 0.1% in 2023 over 2022, based on premium reported as of June 10, 2024, despite a significant increase in the number of policies.

Increased competition from the supply side, along with improving cyber security practices and decreases in claims, have helped blunt rates increases, the report said.

Surplus lines insurers continued to expand their market share in 2023, with Best noting that “surplus lines carriers are in a prime position for even more growth in cyber insurance since they can respond faster to the changing needs of insureds,” as they do not need approved policy form language.