Speaking at S&P Global Ratings’ briefing at RVS Monte Carlo 2023, Johannes Bender director and lead analyst stated that “reinsurance pricing should be increased further for cyber.”
During the briefing he addressed how cyber is one of the fastest growing lines of business within the industry, highlighting the $12 billion in premiums that were recorded in 2022.
“This could wind up reaching our estimate of $23 billion by 2025,” he said.
“So 20-30% in growth rates could potentially exist there.”
He continued by explaining how the importance of reinsurance is very pronounced within cyber as more than 50% is reinsured across that line of business.
But, the performance of primary cyber reinsurance remains very different.
Bender, continued: “Primary writers had good years between the last two to three. But, on reinsurance it was different, with across combined being slightly above 100%.
“Therefore our assumption is that reinsurance pricing should be increased further for cyber.
“But at the same time, our assumption is that the primary rates should not be passed on at the same rate to policy holders, not to distract the market because of the better margins in the primary side.
“Within this market its still in its infancy. Market participants in our view are also cautious in putting even more pressure on policyholders because the market is still so early and policyholders are still getting used to it.”
Further, Bender also addressed how silent cyber looks to be well covered and that it remains to be a factor that is on everyone’s mind across the industry.
“It has gone out of existing coverages into explicit cyber coverages which to some extent is good for claims management.”
