Total cyber insurance primary premium grew 12.6% last year to $US2.03 billion ($2.92 billion), AM Best says.

While cyber premium has more than doubled since 2015, primary premium growth has slowed from recent 30% highs, according to the ratings agency.

There were nearly 3 million policies in force last year, up from 2.6 million in 2017.

Standalone cyber insurance packages grew to $US1.11 billion ($1.6 billion) from $US990 million ($1.42 billion), and packaged policies – which include cyber under identity theft insurance – increased to $US922 million ($1.33 billion) from $US813 million ($1.17 billion).

Insurers are removing cyber from traditional insurance policies to create a separate product, the ratings agency says. And smaller insurers are offering cyber coverage thanks to the standardisation of cyber-policy forms. Many are ceding all risk to reinsurers.

There were 12 million reported claims last year, and claims growth outpaced premium inforce by 24%, which AM Best sees as further evidence of growth in small business cyber purchases: fewer cyber protections for small businesses leave them more susceptible to attacks, driving the rapid increase in claims.

AM Best expects increased competition to put pressure on profitability in the sector.