Mid-year state of the cyber market update>
– Updates Finance
The cyber insurance market is experiencing a more competitive rate environment in 2023 after two years of substantial rate increases and strict underwriting requirements.
Miguel Canals, SVP and senior cyber underwriter at Munich Re US, stated that the rate change for cyber insurance decreased from +34.3% in 4Q21 to +8.4% in 1Q23, indicating a deceleration in rate increases.
This suggests that the market may not experience the same level of rate increases as in 2021 and 2022.
Three key loss trends in the cyber insurance market are highlighted by Canals.
First, there is an uptick in ransomware attacks, with increased frequency and the additional risk of data exfiltration.
However, efforts by the insurance industry to enforce stronger cybersecurity controls have resulted in a reduced number of claims.
Second, there is an increase in privacy litigation claims, particularly related to pixel and tracking technology litigation and the Biometric Information Privacy Act (BIPA) of Illinois.
Settlement amounts for class action lawsuits in this space can vary significantly.
Third, the cyberattack on the MOVEit file-transfer software has raised concerns in the market due to its widespread impact.
Carriers have varying views on the severity of this vulnerability based on their portfolio compositions.
In response to the shifts in the cyber insurance market, carriers are adjusting their strategies.
Some carriers in the excess space are broadening their appetite and offering higher limits, while primary carriers are more focused on increased self-insured retentions.
Carriers are also tightening their policy wordings to address privacy litigation claims and are updating their cyber war clauses to provide clarity and transparency to policyholders.
Munich Re US supports clients by providing cyber security expertise, reinsurance capacity, cyber underwriting and claims training, and accumulation consultation to bolster their cyber resilience.
Link: https://www.insurancebusinessmag.com/us/news/cyber/midyear-state-of-the-cyber-market-update-459085.aspx