US cyber rates may stabilise in 2024 after recent capacity surge: Aon
US cyber insurance rates can hold stable throughout 2024 following a surge in capacity that cut rates to the tune of 17% in 2023, but may yet run up against challenging claims trends, analysts at Aon have said in their latest review of the market.
“Pricing for cyber insurance is expected to remain stable through 2024 due to ample capacity and a competitive market environment,” analysts wrote.
That’s a continuation from the story in 2023 where despite a growing number of cyber incidents and heighted privacy regulation, the US “showcased expansion of a buyer-friendly cyber market” on the way to a 17% decline in headline rates.
“New and returning insurers are bringing in fresh capital and intensifying competition, leading to rate deceleration,” Samantha Billy, growth broking leader for Aon’s cyber sin North America, said for the report.
Insurer enthusiasm went nominally against incident trends, but arguably still in line with much of the security gains made in the upswing of the pricing cycle. Aon claims a “notable surge in cyber and privacy incidents” during H2 2023, including what Aon Cyber Solutions even claims was a 214% year on yar increase in ransomware activity in Q4 2023
2024’s expected stabilization in pricing will likely also include tighter controls and terms, Aon believes. “This reflects the growing complexity and severity of cyber risks,” authors wrote.
Other trends visible at end-2023 to watch for in 2024: About 20-25% of businesses purchased additional limits in Q4 2023 while less than 3% reduced their purchased limit. And businesses managing to reduce their retentions saw an uptick in Q4 2023, ending the year at around 15% around twice the rate of businesses experiencing retention increase.
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