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Cyber ​​insurance pricing is off peak levels in the covid era



COLORADO SPRINGS, Colo. – Buyers of cyber liability insurance will likely continue to see significant rate increases during upcoming renewals, but the huge increases of the past year may be behind them.

Insurers remain eager to write cyber business but have limited their capacity after paying significantly higher losses during the COVID-19 pandemic, insurers and brokers said at the Insurance Leadership Forum in Colorado Springs this week.

The cyber liability insurance market became challenging for policy buyers with rising prices and shrinking capacity following the increase in breach incidents and ransomware attacks in 2020, said Christian Hoffman, CEO of Aon PLC’s Cyber ​​Solutions Division in North America.

However, the insurance industry invested in technology and underwriting tools, which led to more stability in the market, he said during a panel discussion on cyber risk at the conference, organized by the Washington-based Council of Insurance Agents & Brokers.

“Hopefully we̵

7;ve created a bit more of a stability baseline, which will give us a long-term view of supporting this risk,” he said.

Policyholders have become more focused on cyber “hygiene” and cybersecurity in response to the difficult insurance market over the past 18 months, said Mike Karmilowicz, New York-based president and CEO, insurance division, at Everest Re Group Ltd.

“I think the cyber market will continue to be stable. Interest rates will continue to come down, but you’re talking about prices that are up 100% in the last nine months,” he said.

Insurers in the cyber market had reduced capacity, but current available capacity is likely to hold, insurers and brokers say.

According to a report released by Marsh LLC last week, the average cyber liability level increased by 54% in July compared to 133% in December 2021.

Cyber ​​rate hikes are slowing but rates are still rising significantly, said Neil Kessler, Dallas-based president and chief operating officer of CRC Insurance Services Inc.

According to CRC’s analysis, 82% of cyber liability accounts placed by the wholesaler in June saw rate increases of at least 20%, and 44% of those accounts saw an increase of more than 50%.

Cyber ​​insurance companies that are in the market want to stay in the market.

Cyber ​​liability “is a really busy market” with a large number of insurers, but rates continue to increase significantly, said Kevin Kerridge, New York-based CEO of Hiscox USA, a unit of Hiscox Ltd. which is aimed at small businesses.

“I don’t think supply is inhibiting demand. It feels like historically rates haven’t been where they need to be and we’re not at the point yet where the supply of capacity is eroding the rates carriers need for these risks,” he said.


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