In the first edition of its quarterly index that presents cyber data separately from financial and professional lines, Marsh has announced that cyber insurance pricing has increased again in Q3, outpacing other products.
Cyber insurance pricing increased globally by 53% in Q3, while Property insurance pricing increased by 6%, Casualty insurance pricing increased by 4%, and financial and professional lines insurance decreased by 1%.
Marsh notes that US Cyber insurance pricing increased 48% in Q3, compared to 79% in Q2.
The report adds that having experienced increased competition, more insurers increased capacity for insureds with strong cybersecurity controls.
The increased competition in the US cyber insurance market is attributed to many factors, says Marsh, including improved cybersecurity controls, the effect of retention level increases and rate adjustments in 2021, a reduction in claims frequency over the past six months, and higher interest rates leading to insurers seeking top-line growth.
The firm notes that discussions continued in the industry and government regarding systemic exposures and the correlated nature of cyber risk.
As for UK cyber insurance pricing, Marsh reports a 66% increase in Q3, continuing the moderation trend of the past several months, as losses continued to improve.
The market experienced continued pricing stabilisation following a peak increase of 102% year-over-year in Q1 of 2022, says Marsh.
It adds that strict requirements from insurers regarding key cybersecurity controls continued to positively change underwriters’ views on cyber hygiene at the majority of insureds compared to 2021 and before.
The report notes, “We are cautious regarding the improvement in cyber insurance market conditions as other factors could compound the risk. For example, the Russia-Ukraine conflict may have temporarily paused ransomware attacks by disrupting the many cyber hackers based in the region.”
Marsh reports that cyber insurance pricing in Europe increased 40%, compared to 50% in the second quarter, as new capacity entered the market.
It observes that insurers continued to seek to increase retentions in many instances, and underwriters continued to require detailed information on cyber risk controls, particularly regarding ransomware.
Asia Cyber insurance pricing remained challenging, with rate increases of 25% or more experienced by some clients.
Marsh notes that concerns continued regarding claims, systemic risk, geopolitical tensions, and ransomware. Though as in other regions, there were signs in the quarter that the cyber insurance market is stabilising.
The report states that cyber insurance pricing in Latin America continued to present challenges, though appetite and capacity from international markets increased for regional cyber risks — mostly excess capacity.
Cyber insurance pricing in the Pacific also remained challenging, however, the report notes it too began to stabilise in the quarter, as insurers sought to grow their business in this area. Meanwhile, ransomware continued to dominate the claims environment.