Reinsurance News

Stand-alone protection for cyber ‘essentially unobtainable’ at economical terms: Gallagher Re

6th July 2022 - Author: Jack Willard

According to Gallagher Re’s mid-year renewals report, stand-alone risk protection for cyber is essentially unobtainable at economical terms, however some cyber risk protection is still available via composite casualty treaties.

gallagher-re-logoThe report also highlights how there is a continued appetite on the proportional side for supporting existing programmes as both cyber premium and exposure grows on a standalone basis, as well as where cyber forms part of composite treaties.

Moreover, Gallagher Re notes that markets are managing line sizes, while also being “increasingly vocal” about the challenges of retaining cyber within composite treaties.

At the same time, significant risk-adjusted rate increases are being driven by increasing attachment points, treaty limit compression, and higher rates on line.

However, the report states, that despite significant rate hardening in underlying portfolios, market performance deterioration on prior years of account, meant that reinsurer loss picks did remain stable, rather than reducing.

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With aggregate structures also becoming less attractive to buyers, there have been examples of global treaties being bifurcated regionally/segmentally in order to reduce dollar retentions.

Lastly, in the Cat/Event/Occurrence, section of the report, Gallagher Re notes that there has been increasing interest in occurrence structures from clients and reinsurers, although  there has been no immediate move to this structure as of yet.

Meanwhile, it was recently announced that Gallagher Re and Africa Re are joining forces to strengthen the financial resilience of African countries.

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