Analysts at Berenberg have reported that hardening conditions in the cyber re/insurance market show no signs of slowing down, as demand for coverage continues to outstrip supply.
As of Q3 2021, rates were up 204% cumulatively over 12 months and, currently, and Berenberg sees no evidence that this momentum will be halted any time soon.
Within the cyber space, reinsurance capacity continues to be scarce, with players choosing to back carriers with long-standing relationships and track records.
Carriers are also singled out by those that have established actions to improve profitability via underwriting and risk management – not just rates.
Among these, Berenberg identifies Beazley as a company that is set to benefit in particular from the “truly hard” cyber market conditions.
“While we expect most of the cyber growth in 2022 to be driven by rates, we believe there is scope for Beazley to cautiously start increasing exposures again with the support of its reinsurance partners,” Berenberg said. “In such a case, this will act as a positive catalyst for the shares at the full-year results, in our view.”
Analysts continued: “Across cyber, we have long argued that Beazley is ahead of peers in terms of risk management and underwriting capabilities, and we believe that Beazley has made a lot of progress in getting profitability back on track.”
