According to Risk Strategies State of the Market update, the cyber insurance market is beginning to stabilise after years of steep rate increases, though insurers will continue to be on high alert through the remainder of the year and into 2023.
The report notes that the pace of cyber attacks has slowed throughout the year due to improved awareness and better cyber maturity in the marketplace, driven by the increased underwriting scrutiny over the last 24 months.
Though it adds that carriers remain conservative and restrictive on coverage, limiting their exposure to ransomware claims and systemic events in certain instances where controls still require improvement.
The first two quarters of 2022 saw 50% rate increases on average, says the report, but Q3 decelerated to increases in the 30% – 40% range.
Insurance broker and risk advisor, Marsh, recently stated that cyber insurance pricing has increased again in Q3, outpacing other products, though it too notes a decrease compared with previous quarters.
Marsh added, “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.”
Meanwhile, Risk Strategies suggests buyers with claims and industries with historically adverse claims experience are still seeing increases well in excess of market averages.
Risk Strategies concludes that in a market absent of a catastrophic event, there should be further stability heading into 2023.
It writes, “As evidenced by the Risk Strategies rate index, we have seen rate deceleration amongst our client base in the last two quarters. Excess rates are beginning to come down due to new capacity entering the market, which is usually a precursor to further softening of primary layers.”
The firm projects rate increases could get down to the 10% – 25% range in 2023, under the right conditions.