Subdued cyber claims can’t hold; low frequency looks temporary: Hiscox

Cyber insurance remains “volatile” and could leave the industry with a rude awakening when the downturn in incidence frequency following the onset of the Russia-Ukraine conflict proves temporary, the top underwriter at Hiscox has claimed. 

“Our view is that this is more temporary, not structural,” group chief underwriting officer Joanne Musselle told her company's 2023 earnings call of a downturn in global incidents as Russian and Ukrainian cybercriminals focused their attention against one another after the 2022 invasion.  

“Others may have taken a different view,” she said of insurers who have played along with the cyber insurance market’s move into rate softening, admitting that Hiscox “became uncompetitive” when it refused to follow the prevailing market pricing. 

Cyber took the lion's share of the blame for a subdued rate of premium growth across Hiscox's retail insurance ventures in 2023. 

Premium growth rose 4.2%, which management admitted is “below expectations.” The impact of cyber was most noticeable in the US retail operations, but was also palpable in the UK and the London Market, Musselle said. 

“It has all been about price,” Musselle said. 

Cyber has seen double-digit rate decreases in the London Market, remains “competitive” in Europe and suffers “challenging market conditions” in the US where the business is “taking longer than expected to pivot to growth after the book was decisively re-underwritten.”

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