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Cyber Attacks Provide Considerable Growth Avenue for Specialty Insurance Market

Press Release   •   Aug 16, 2017 05:08 EDT has added a new report to its repository, titled, “Insight Report: Specialty Insurance - Key Trends and Opportunities in the Market.” It offers a complete study with detailed reports of historical market performance, present trends, and future prospects of the market across the world.

Besides the ubiquitous life insurance, home owners’ insurance, and automobile insurance, a host of other specialty insurance policies have taken the insurance market by storm, these days. Some such examples of specialty insurance are identity theft insurance, flood coverage, mobile home coverage, personal watercraft coverage, motorcycle insurance, boat insurance, pet insurance, private mortgage insurance, travel insurance, title insurance or renters insurance. Specialty insurance can also cover unique items such as body parts of actor and actresses, which they consider their best assets and their money makers. As the name suggests, specialty insurance is purchased for things that are perceived as unique.
It is said that a difficult property and casualty market, resulting in razor-thin profit margins, has spawned specialty insurance market. The size of the global market for specialty insurance, vis-à-vis gross written premium, was between US$140 to US$180 bn in 2013. The US contributed more than half in that share. The report finds the outlook for the market to be upbeat in the upcoming years.
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Currently, the cyber liability market presents enormous opportunity for specialty insurance providers. This is because of the alarming increase in cybercrimes and data breaches in a hyper-connected world necessitating insurance protection against them. The market for US cyber liability insurance was worth around US$1 bn in 2013 and is now well over US$2 bn. Europe is another major market for cyber-liability insurance, which is expanding at a cracking pace. Asia and Latin America too offer major growth avenues for specialty carriers in the upcoming years.
Besides, cyber-attacks, other things creating growth avenues for the insurance specialty market are carbon credit risk and risks associated with space weather changes, technology changes, and input materials prices for manufacturing industries.
Specialty insurance entails high-risk as well as high-return. The underwriting cycles for specialty insurance products are at present in a tough market phase, bringing about increased underwriting profits for insurers. Specialty carriers worldwide, see much higher underwriting profitability in comparison to casualty and property insurers. However, catastrophic risks to which they are exposed can lead to steep losses.
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One problem facing specialty insurers is the dearth and subsequent steep cost of hiring underwriting and actuarial talent. Specialty products are high risk and complicated in nature. They require expert knowledge for profitable underwriting. This is likely to stoke considerable wage inflation in the foreseeable future. To tackle the problem, insurers are trying to train people in-house through internal programs.
Some of the prominent participants in the global specialty insurance market are Lloyd’s, Hiscox Ltd., Catlin Group Ltd., HCC Insurance Holdings, Inc., and RenaissanceRe Holdings Ltd.