In its latest update of the cyber market, broker Marsh said there are signs of improvement, with average rate increases continuing a trend of stead decline.
Marsh said rate increases for cyber insurance have decelerated nearly 80% on average in just six months. Average rate increases were 54% as of July 2022 compared with 133% at December 2021.
“The outline of a more stable market on the horizon is becoming clearer as time passes,” Marsh said. “We are optimistic the market will continue to build on this momentum and continue its path toward stabilization.”
New capacity and insurers continue to enter the cyber insurance marketplace; organizations are improving cyber hygiene; carriers are enhancing risk engineering and management capabilities; and there is more communication among the insurance industry, corporations, government, and law enforcement.
Marsh said insurers are revising strategies, adjusting risk appetites and product composition. The broker said the trend continues of insurers cutting back or not offering ransomware coverage if clients have poor controls in place. Additionally, Lloyds proposed new exclusions for war and state-sponsored attacks.
Lloyd’s Insurers Must Exclude State-Backed Cyber-Attacks to Avoid Systemic Risks
However, coverage clarity is still in need of improvement, Marsh said. This affects buyers’ “confidence in and comfort working with the cyber insurance market” even as products are proven to be an effective risk transfer and risk management mechanism. Demand is high. Marsh said first-time buyers have nearly doubled in five years.
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