RISK MANAGEMENT
the premiums are concentrated in less than 20 % of those cyber-writing insurers .
02 . Cyber coverage is most often provided as part of a package policy . For every standalone policy , there are 18 businesses covered under an endorsement to their package policy . Correspondingly , there are more insurers providing coverage as endorsements instead of standalone policies . Of the 780 insurers that write cyber insurance , 501 write coverage as part of a package policy , and 135 write standalone coverage .
THE CYBER THREAT IS REAL .
03 . The average premium highlights the difference between standalone and package coverage . Standalone commercial premiums average $ 7,800 per policy , while coverage under an endorsement to a package averages only $ 302 per policy . When written premiums in 2019 are totaled , standalone premiums are $ 1.2 billion , and packages are $ 900 million .
Average claims follow premiums , with the average standalone cyber claim totaling $ 88,281 and the average package policy claim totaling $ 46,670 .
What about those losses when compared to premiums ? Although it may seem low , 49 % is what one would expect . Specialty lines usually have loss ratios between 55-65 %, but cyber is a new business .
If a new line with uncertain claim potential were averaging 75 % loss ratios , the willing insurers of the coverage would shrink , and prices would rise until a somewhat favorable loss ratio was achieved . After all , with low investment income generally for insurers in fixed investments like bonds and mortgages , it ’ s all about the loss ratio on new premium dollars .
If your question is on a risk and coverage issue , go to Big “ I ” Markets and consult the experts there with the Swiss Re-backed program underwritten by the Coalition experts . Of course , I heed the advice of the errors & omissions experts in Big I Advantage ® and document your file for those not interested in buying coverage for cyber exposures . . Paul Buse is operations and strategic advisor , Big I Advantage ®.
One in five small and medium businesses will fall victim to a cyber attack .
Quote & Bind Today ! bigimarkets . com / coalition-cyber
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