Cyber Premiums in Bermuda Captive Insurers Grew 53 Percent

The Bermuda Monetary Authority's (BMA) recent annual report on cyber underwriting revealed that organizations using Bermuda captive insurance structures to cover cyber-risk exposures increased year-over-year.

Findings for underwriting data aggregated from 17 captive insurers' 2018 regulatory returns show 53.6 percent growth in cyber-related premiums underwritten by Bermuda captive insurance companies year-over-year.

This represents gross written captive premiums of approximately $61 million and net written captive premiums of $31 million. Of the total affirmative cyber gross written captive premiums, 56 percent were on a direct basis, and 44 percent were written as reinsurance.

The report mentions that commercial insurers and  captive insurers continue to face challenges when it comes to cyber-risk pricing, risk aggregation, and reserve analysis.

The BMA said it expects that, "as part of the application of prudence, insurers have the relevant skills, clear strategies, and board-approved risk appetites to address some of the challenges associated with cyber-risk exposures, [which] reflects the wide-reaching and interconnecting nature of cyber risk in its relationship to the operating environment of all insurers, especially in this digital age."

The report can be found at www.bma.bm/publications/bma-surveys.