Bermuda Captives' Cyber-Insurance Premiums Jumped 42 Percent in 2020
April 21, 2022
Gross cyber-insurance premiums written in Bermuda-domiciled captive insurance companies increased approximately 42 percent in 2020, according to a recent report from the Bermuda Monetary Authority (BMA).
In 2019, cyber-insurance premiums in Bermuda captives increased 10 percent, the BMA reported in its Bermuda Cyber Underwriting Report 2021.
Bermuda captive insurance companies wrote $102.6 million in cyber-insurance premiums in 2020, the BMA said, up from $72.3 million in 2019. Meanwhile, the number of Bermuda captives writing cyber insurance increased from 20 to 23 in 2020, the BMA said.
"With companies still facing the effects of COVID-19 and the recent transition to remote working arrangements, protection of company data continued to be a vital priority for all business sectors in 2020," the BMA report said. "At the height of the pandemic, companies had the opportunity to assess their needs and fine-tune their processes to ensure that their data remains well protected, highlighting the attractiveness of utilizing captives as an efficient risk management tool for their overall cyber-risk exposures."
Of the total cyber-insurance premium written in Bermuda captive insurance companies in 2020, 68 percent was written directly by the companies, while 32 percent was written on a reinsurance basis.
The BMA said it expects to see increased interest in writing cyber insurance in captives as captive insurance companies continue to prove their value to their parent organizations in managing cyber-risk exposures.
"The Bermuda captive market remains steady and versatile, accommodating both the new captive formations writing cyber-related exposures and the expansion of current captives adding cyber exposures or increasing premiums in existing cyber policies," the BMA report said.
April 21, 2022