Some encouraging signs
The volatile conditions that have disrupted the Cyber market in recent years are stabilising. Of course, the market is by no means reversing course entirely, but several key performance indicators suggest that the general outlook for insurance buyers is far more optimistic moving forward. Preliminary data released by Marsh shows that cyber-insurance pricing increased by 10% from a year earlier in January, a fraction of the 110% annual increase reported in the first quarter of 2022. Marsh further noted that claim frequency declined in the fourth quarter of 2022, even as severity remained elevated.
According to several major brokers, the improving conditions can be attributed to a change in insurers’ underwriting philosophies (i.e., how they write policies and their risk appetites) and more robust cybersecurity measures being adopted by businesses.
“What we’re left with is a very, very, very different market than what we went into two or three years ago,” said Paul Bantick, the global head of cyber risks at London-based insurer Beazley Plc. “We have a mature market that has stood up against a huge test.”
Signs of improvement
These developments attract fresh capacity from new (international) insurers entering the market, driving a more competitive environment and providing some relief on pricing. However, while the Cyber Liability market is showing signs of improvement, and pricing pressure is starting to ease, the risks posed by cyber criminals are still enormous and securing appropriate cover will continue to be a challenge for many businesses, particularly those with limited or weak cyber-security systems.
Insurers will likely remain overly cautious when deploying their capacity, with only the most appealing, well-managed risks being able to take advantage of the positive developments in the market, including the additional capacity that now exists.
In such an environment, the performance of your insurance broker is critical. Their capabilities and expertise in cyber security could be the difference between having the right cover at the right price or having insufficient and overpriced cover.
Please don't risk it. Contact us today to discover how you can leverage the expertise of multiple insurance industry experts to achieve the best cyber-security measures for your business.
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