The recent CrowdStrike (NASDAQ:CRWD) outage may be bad news for CRWD stock, but it may be a different story for cyber insurance stocks. In other words, shares in property and casualty (P&C) insurance companies that offer cyber insurance products.

Cyber insurance policies, as you might have guessed, help businesses manage internet-related risks, including cyberattacks, data breaches, as well as outage incidents like the one listed above. Cyber insurance may make up only a tiny portion of worldwide premium volumes, but not surprising, it’s a fast-growing space.

According to a white paper from Munich Re (OTCMKTS:MURGY), the global cyber insurance market is expected to grow from $13 billion in 2023, to $27 billion by 2027, a more than 100% increase. Better yet, the Crowdstrike outage could serve as a tailwind for the industry, leading to even greater-than-expected growth in the coming years.

Again, while more a specialty line of insurance, high growth in this niche could still provide a meaningful boost for each of the following property and casualty insurance stocks.

American International Group (AIG)

American International Group (NYSE:AIG) is not only one of the top cyber insurance companies; it practically invented the industry. Back in 1997, the global insurance giant underwrote the very first cyber insurance policy. Now, despite this first-mover status, AIG is not the largest cyber insurance company out there.

Based on 2023 premium volumes of $274.4 million, American International Group is the ninth-largest underwriter of cyber insurance policies, according to A.M. Best. Still, while a very small portion of AIG’s overall business, high growth in this insurance specialty could help bolster the company’s fiscal performance in the years ahead. Beyond just a possible cyber insurance catalyst, there are other reasons to consider entering a long-term position in AIG stock.

Thanks to a successful turnaround, AIG has surged by more than 31% over the past year. More gains may be in the cards, given forecasts calling for further steady increases in profitability during 2025 and 2026. Reasonably-priced at around 13 times forward earnings, the stock currently has a forward dividend yield of 2.05%. Although dividend growth has been mixed over the past few years, the company did recently raise its quarterly payout by 11.1%.

Axis Capital Holdings (AXS)

Bermuda-based Axis Capital Holdings (NYSE:AXS) sells specialty insurance and reinsurance products around the world. Alongside business insurance lines like errors and omissions (E&O) and professional indemnity, the company is also a major seller of cyber insurance coverage. According to segment information provided in Axis Capital Holdings’ latest 10-K annual filing with the Securities and Exchange Commission (SEC), cyber insurance premiums totaled $323 million.

This represented around 6.35% of overall premium revenue. While just a small percentage of Axis Capital Holdings’ overall business, potential demand growth due to the CrowdStrike outage could mean increased growth from this segment. In turn, this could result in greater-than-expected overall growth, benefiting AXS stock in two ways. First, of course, is that shares will likely rise in line with earnings growth.

Second, with higher earnings could come a re-rating for AXS to a higher forward multiple. Right now, the stock trades for just 7.4 times forward earnings, a substantial discount to other P&C insurers. That’s not all. The cyber insurance tailwind could also result in further dividend growth. AXS currently yields 2.39%, and has increased its dividend by an average of 17.38% annually for the past five years.

Chubb (CB)

Last year, Chubb (NYSE:CB) was the largest U.S. cyber insurance company by direct premium written. Although written premium volumes declined in 2023, potential tailwinds from the Crowdstrike incident may mean better performance for this segment in 2024 and beyond. However, much like AIG, there are other strong reasons to consider a position in CB.

As I have noted in recent coverage, CB stock is not only one of the top cyber insurance stocks to buy. It’s also an undervalued Dividend Aristocrat, as well as one of the top Warren Buffett stocks. For 31 years in a row, Chubb has implemented an increase to its quarterly dividend. The insurer has also been aggressively returning capital to shareholders through a $5 billion share repurchase program.

As for its status as a Warren Buffett stock, the Oracle of Omaha’s recent big bet on Chubb has undoubtedly played a major role in its strong price performance lately. Shares are up 22.4% year-to-date, in large part due to Buffett’s Berkshire Hathaway (NYSE:BRK-A, BRK-B), itself a major insurer, revealing that it had purchased a 6.4% stake in the Swiss-based P&C insurance firm.

Hartford Financial Services (HIG)

Hartford Financial Services (NYSE:HIG), also known as The Hartford, is one of America’s oldest insurance companies, in business for over 200 years. However, this “old school” status hasn’t stopped this insurer, which is also in the group benefits and asset management businesses, from capitalizing on changing insurance needs in a digital world.

According to A.M. Best’s numbers, The Hartford came in as the 16th largest provider of cyber insurance in the U.S. last year, but direct premiums written for cyber policies did increase by 14.8% last year. Among numerous factors driving HIG’s recent strong fiscal performance, cyber insurance growth played a role, albeit small. Going forward, if cyber insurance growth continues, it could contribute further in keeping HIG on an earnings growth winning streak.

In turn, it could enable HIG stock, up 55.5% over the past year, to continue surging even higher. Trading for 11 times forward earnings, Hartford Financial Services may still have room for further multiple expansion. For more than a decade, HIG has also been steadily increasing its dividend. The latest increase, from 42.5 cents to 47 cents per share, came in at 10.6%.

Markel Group (MKL)

Markel Group (NYSE:MKL) is a specialty insurer with a reputation for being a sort of a “mini” or “baby” Berkshire Hathaway. Some analysts are quick to dismiss this comparison, but they are certainly very similar. Like Berkshire, Markel has been successful at investing P&C insurance premiums into stocks and the acquisition of non-insurance businesses.

This has resulted in strong annualized gains for long-term MKL stock investors, although shares have trailed the broad market over the past decade. However, through the sale of specialty policies in niches experiencing increasing demand, like cyber insurance, perhaps factors like improved earnings growth could help turn MKL into a market-beating stock again.

Although Markel is one of the pricier cyber insurance stocks with a forward multiple of around 19.3, forecasts already call for the insurer to experience solid earnings growth over the next few years. Analyst consensus calls for earnings growth of 21.6% in 2025, and 13% in 2026. MKL doesn’t pay a dividend, yet management has been returning capital, in the form of share purchases. As Seeking Alpha commentator Eric Sprague pointed out earlier this year, Markel bought back 5% of its outstanding shares during 2023.

Travelers Companies (TRV)

As one of the largest P&C insurers, it’s no surprise that Travelers Companies (NYSE:TRV) is also one of the largest underwriters of cyber insurance in the United States. Per A.M. Best, Travelers was the fourth largest U.S. cyber insurer last year, with direct premiums written totaling $384.9 million.

Yes, that’s a drop in the bucket compared to overall premium volume. Still, cyber written premium volumes rose 22% in 2023. If this trend continues, it could play a small role in helping Travelers continue to report strong underwriting volumes and income, as has been the case in recent quarters. Speaking of which, it goes without saying that strong underlying results have made TRV stock one of the more popular P&C stocks among investors.

Over the past 12 months, shares have rallied by 27.7%. Even so, at a forward multiple of 12.6, its valuation has yet to get out of hand. Further strong underwriting performance may help TRV continue to move towards the upper band of valuation. Besides still solid growth potential, TRV may be appealing to dividend growth investors. Although shares yield just 1.91%, dividends have increased 18 years in a row.

W.R. Berkley (WRB)

Based in Greenwich, Connecticut, W.R. Berkley (NYSE:WRB) is another major specialty insurer in the United States. Yes, not only does W.R. Berkley fail to make A.M. Best’s top 20 cyber insurers list but last year, policies issued by WRB’s Berkley Cyber Risk Solutions unit made up just 0.8% of overall gross premiums.

So what makes WRB stock one of the top cyber insurance stocks to buy? Beyond the possibility that a cyber insurance boom, driven by the CrowdStrike outage, possibly leads to W.R. Berkley placing greater focus on this insurance type, there are other strong reasons to make WRB a long-term holding. Generally regarded as one of the best-run insurance companies, and like Markel, sometimes compared to Berkshire, WRB has a strong track record in terms of price performance.

Shares have gained 367.4% over the past decades and are up more than 43-fold over the past 30 years. As seen in W.R. Berkley’s latest fiscal results, the company continues to generate a high return on equity. Management also remains committed to return-of-capital efforts, with share repurchases and dividends totaling $381.3 million during Q2 2024 alone.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.