Greater demand for cyber insurance products combined with rising cyber prices driving an increase in premiums written globally
Greater demand for cyber insurance products combined with rising cyber prices are driving an increase in premiums written globally, Gerry Glombicki (pictured), senior director at Fitch Ratings, told Intelligent Insurer. Capacity is another key topic of conversation, particularly around people leaving cyber as the rates aren’t as attractive as people thought they were.
Yet this talk is not necessarily translating into action. “On net you’re probably seeing a small amount of people entering the market, but it’s roughly equal in terms of capital. You’re not seeing anyone pull out substantially, particularly not any of the larger players in the market. Cyber is being held on to, so it’s throwing some balance into it,” he said.
Cyber remains a relatively hard market, Glombicki said. The increases are starting to soften but they remain positive. “It’s still an increasing price but the pace of the increase isn’t as dramatic as it has been in the past.”
Cyber may be continuing its upwards price and premium growth trajectory but the challenge of getting access to quality data, especially around the evolution of risk, is an issue going forward. The problem is the unknown or identified vulnerabilities, Glombicki said, and how quickly organisations can adapt and act to defend against them.
In addition to price increases, contract terms and conditions have tightened and the process of underwriting cyber risks has evolved, he said.
“First people were asked: ‘would you like the product?’. Cyber was just thrown in as an add-on. From the add-on it went to a questionnaire as part of the process and now you’re starting to see that you need certain things that are requirements to underwrite the account.”
Clients usually need to have multifactor authentication in place before their risk will be underwritten, with employee training around cybersecurity another must-have, and board signoff is also becoming more common.
“You’re starting to see a maturity in how the risk is being underwritten but it’s going to take some time for that maturity to be set in stone because, again, the risk is constantly evolving and you have to stay on top of it.”
