The cyber insurance market will continue its rising medium-term pricing moment in COVID-19, amid rising rates and the severity of claims, A.M. Best Inc. said in a report Tuesday.
Even before the pandemic, cyber market prices rose by 4% to 5% due to insurers' concerns about growing ransomware attacks and data breaches, Oldwick, a New Jersey-based rating agency, said in the report.
The number of cyber claims doubled to 18,000 in 2019, from 9,000 in 2017, AM Best said in the report.
Independent direct paid losses and defense and cost containment ratios also rose for the third year in a row to 32.5% in 201
"Demands are growing exponentially, which will be a matter of prices not being able to keep pace with rising frequency," said Best.
Protracted litigation shows that cyber attacks can have a longer tail than expected and underscores the importance of dealing silent cyber, Best said in his report.
"The frequency and severity of ransomware attacks has escalated, with municipalities such as Atlanta and Baltimore becoming valuable targets," the report said.
Attacks on the healthcare industry also continued to grow in 2019 , with healthcare data in the highest demand for sales on the dark web, and the severity of ransomware claims increased, said Best.
Referring to CoveWare data, Best noted that the average redemption payout increased to $ 84,1116 in the fourth quarter of 2019, an increase of 104% from t The third quarter.
Insurance pricing strategies remain "underdeveloped" as they rely on thumbs up l processes such as revenue and number of items, as opposed to actuarial data, to arrive at prices, said Best.  More insurance and risk management news about the coronavirus crisis here .