As experts search for ways to combat evolving cyber threats, the National Association of Insurance Commissioners (NAIC) released a new analysis today examining how cybersecurity risks impacted the U.S. insurance market in 2020.
The regulatory support organization, which assists state insurance regulators and supports the public interest, released its Cyber Insurance report on Monday. Utilizing data found within the Cyber Supplement, as well as data collected through the NAIC’s International Insurance Department, the new report shows a cybersecurity insurance market of roughly $4.1 billion — reflecting a premium increase of 29.1 percent from the prior year. The report also found that insurers writing standalone cybersecurity insurance products reported approximately $2.58 billion in direct written premiums, and those writing cybersecurity insurance as part of a package policy reported roughly $1.49 billion in direct written premiums.
Some of the top U.S. groups writing standalone and package cyber insurance included Chubb Limited ($404,144,104), Axa (293,025,192), and American International Group ($228,424,711).
“The reasons the financial services sector is susceptible to cyberthreats are multifaceted. Financial firms receive, maintain, and store substantial amounts of personally identifiable information (PII); however, insurers, in many cases, receive personal health information in addition to personal financial information from both policyholders and claimants,” the report stated. “In both cases, recent legislation is potentially expanding the definition of PII, adding to the risk associated with a cybersecurity event.”
Additionally, NAIC noted in their report that health care breaches continue to grow year to year. In 2020, healthcare threats saw a 55 percent uptick, with that number expected to grow in 2021. NAIC added that the increased value of personal health information is due to health information containing more PII than financial records.
Ransomware also posed a significant threat in 2020. According to the report, ransomware attacks have grown by 62 percent since 2019.
“State insurance regulators recognize cybersecurity as one of the most important topics for the insurance sector and businesses today,” said David Altmaier, NAIC President and Florida Insurance Commissioner. “The NAIC is committed to developing new ways to monitor this evolving market to better address cyber risk.”
To view the full report, click here.