Bermuda-based captives increase cyber premiums by more than 50% in 2018
Bermuda-based captives took in 53.6 percent more affirmative cyber related gross premiums in 2018 than they did the previous year, according to the Bermuda Monetary Authority in its annual cyber underwriting report.
Gross premiums amounted to $61 million, while net premiums were $31 million, the BMA said. It also noted an overall increase in the number of captives on the island writing cyber coverage.
Class 3 insurers led the way, accounting for 67.8 percent of the affirmative cyber coverage written by Bermuda-based captives. More than half - 56 percent - of the affirmative cyber written by Bermuda captives was on a direct basis, with the remainder being reinsurance.
The BMA warned insurers to be resilient in terms of capital and liquidity, and to establish “proper risk management and governance processes - particularly in the areas of risk quantification, especially for non affirmative, cyber exposures - aggregation, and contagion from an underwriting perspective.”
The BMA added: “Insurers should consider incorporating in their stress testing models the correlation and potential loss arising from a global cyber attack that could impact their own operations, while at the same time being required to pay claims from their insurance operations.”