The European cyber insurance market has become much more friendly, with increased capacity per layer, significant overall capacity growth, removal of coverage restrictions, and more enhancements and innovative coverages available, according to Macarena Bandres, Cyber Placement Leader at Marsh Europe.
Bandres’ spoke this morning at Marsh’s Europe Cyber Market Update, noting that underwriters are now more comfortable with the information they receive. She explains, “The writers seem to be more flexible, and more creative. They can provide more capacity with less restrictions.”
Additionally, the frequency and severity of claims, especially ransomware claims, have increased, and Marsh expects this trend to continue.
Regarding cyber insurance rates, they have decreased for the second consecutive quarter.
Bandres comments, “We are also happy to see that 60% of our clients have experienced a discount in their premiums in this Q2, which has doubled compared to Q4 2023.”
She continues, “We saw a -7 average decrease during Q1 2024, and now in Q2 2024 we are seeing a -10 decrease in premiums, but it is not closed yet, so this rate might change slightly, but we predict that it’s going to stay around those figures.”
These decreases began in the last quarters of 2023 and continued into 2024, following a particularly hard market where premiums were increasing each year, especially in 2021-2022.
Moreover, Marsh has observed that the implementation of cybersecurity controls has improved significantly year over year from 2021 to 2023, contributing to the softening market.
Bandres highlights, “We are still seeing that insurers focus their attention on the implementation of cyber security controls. This is not going to change, and we observe that the better the cyber security control is, and the better cyber security items that they have, the lower the premiums are.”
She adds, “As our clients are improving their cyber security, there is more capacity in the market, the competition is higher, and maturity is higher, bringing down the payments.”
For instance, Marsh clients with higher revenues (above €250 million) and effective cybersecurity controls have seen greater premium decreases, while smaller companies with lower revenues have had more stable premiums. Their premiums didn’t increase as much during hard markets, so their decreases are now less significant since their premiums weren’t very high to begin with.
