The National Association of Insurance Commissioners (NAIC) released its cyber insurance report, utilizing data found within the cyber supplement, as well as alien surplus lines data collected through the NAIC’s International Insurance Department. The 2021 data shows a cybersecurity insurance market of roughly $6.5 billion, reflecting an increase of 61 percent from the prior year.
Insurers writing standalone cybersecurity insurance products reported approximately $4.5 billion in direct written premiums, and those writing cybersecurity insurance as part of a package policy reported roughly $2 billion in direct written premiums.
U.S. domiciled insurers wrote $4.8 billion in direct written premiums, while alien surplus lines insurers wrote $1.7 billion in direct written premiums.
The report also noted that data breaches in 2021 outpaced those in 2020.
“Data breaches in 2021 outpaced those in the prior year, increasing by 68 percent,” the report stated. “Breaches involving personally identifiable information, like Social Security numbers, increased slightly from 80 percent to 83 percent in 2021.
“Because of the increasing cybersecurity risks, businesses are facing a more demanding underwriting process,” the report continued. “Insurers are more thoroughly examining a company’s security controls, internal processes, and procedures concerning cyber risk. Additionally, underwriters are more cautious in examining an insured’s risk presented by the third parties working or contracting with the insured.”