The industry must be prepared to deal with new emerging threats if this trajectory is to continue, however
Losses have improved in cyber insurance as pricing showed an average increase of 66% in Q3 2022 – down from a peak year-on-year rise of 102% in the first quarter of this year, Marsh’s latest Global Insurance Market Index has revealed.
Released last week (27 October 2022), the index highlighted that part of the pricing relief was due to insurers implementing strict requirements regarding key cybersecurity controls, which had a positive impact on underwriters’ views regarding cyber hygiene compared to 2021.
However, Marsh said it was cautious regarding the improvement in cyber insurance market conditions as other factors at play could compound risks.
The Russia-Ukraine conflict may have temporarily paused ransomware attacks due to cyber hackers being disrupted in the region, for example.
Insurance Times has contacted Marsh for comment.
Marsh’s research builds on Allianz Global Corporate and Specialty (AGCS) highlighting several emerging cyber threats in its latest report – Cyber: The changing threat landscape, also published last week (26 October 2022).
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These emerging threats comprised the growing reliance on cloud services, an evolving third-party liability landscape – leading to higher compensation and penalties – and the impact of a shortage of cyber security professionals.
Marsh’s report revealed that, overall, insurance pricing in Q3 2022 increased by 7% – compared to 11% in the second quarter of this year.
Property insurance pricing increases remained steady however, rising by 6% year-on-year.
Pricing remained competitive for low-to-medium-hazard industries and more challenging for those dealing with higher risks with major loss activity and or a challenging occupancy or process – such as food production, warehousing or waste recycling.
Crime insurance capacity remained limited as insurers withdrew from the market following poor loss ratios linked to an uptick in the frequency and severity of claims.