New analysis from broking firm WTW shows that capacity stabilized for most cyber re/insurance market segments in Great Britain (GB) during Q2, with increased competition noted in some areas as available capital grows.
Looking at key developments in the GB market, analysts observed significant changes during the second quarter of 2022, as segments within the market became more distinct and nuanced than previously experienced.
“We are seeing an increasing number of insurers willing to increase their available capacity where the characteristics of the risk match their underwriting strategies,” the report by WTW stated.
And the broker expects to see additional insurance capacity enter the market through Q3, for example via insurtech insurers that have already established themselves in the US and may be looking to compete in the middle-market space.
However, WTW added that clients still need to show good level of risk control in order to secure capacity, although insurers are increasingly demonstrating flexibility where clients can provide the necessary context to explain their risk acceptance rationale.
What’s more, both insurers and reinsurers remain cautious where clients could be at risk from the Russia/Ukraine conflict, and this particularly applies to organisations in telecommunications, financial institutions and critical national infrastructure.
Many insurers quickly reviewed their contract language relating to War and Terrorism exclusions and are mindful that Cyber-attacks have become a modern warfare tactic.
Premium increases in Q2 2022 were far more variable than in recent quarters, as the result of insurers focus on pricing adequacy.
WTW states that clients with similar profiles may receive different levels of premium increases, with the key being whether their insurer feels the expiring premium levels are sufficient.
In this respect, a small but increasing number of clients received a pricing reduction compared to 2021, often where a segment most impacted by 2021 capacity challenges then benefits from increasing competition in that segment.
Analysis of Q2 also showed that insurers remain very focused on systemic risk, and are continuing to take a careful approach when considering new or existing risks, with clients routinely asked to provide evidence of sufficient cyber security controls before a risk will even be given consideration.