The Russia-Ukraine war has put pressure on the insurance market
Cyber insurance pricing in the UK has risen by 102% on average since the previous quarter, according to a report released today (27 April 2022) by Marsh.
While this represents a significant rise in price, the new Q1 2022 report also evidences an increase in the rate at which prices are rising. Cyber insurance pricing in the UK rose by 92% in the previous report’s period, Q4 2021.
The report, entitled the Q1 2022 Global Insurance Market Index, revealed that continued increases in cyber rates are being driven by an increase in the frequency and severity of ransomware claims, with many insurers seeking to tighten coverage terms and conditions – especially in response to the conflict between Ukraine and Russia.
Lucy Clarke, president of Marsh Specialty and Marsh Global Placement, said: “The war in Ukraine, while most importantly a humanitarian tragedy, has added pressure to what is already a challenging insurance market for our clients. We are also beginning to see the impact of rising inflation on loss costs and exposure growth, which in turn could affect pricing.
“However, market fundamentals remain strong, and we expect rate increases to continue their moderating trend.
”We will continue to help clients find competitive pricing and coverage, as well as meaningful insights into how the quickly changing market dynamics may impact their risks.”
Meanwhile, pricing in financial and professional lines had the highest rate of increase across the major insurance product categories at 26% – this was largely driven by cyber.
Compared to the previous quarter, this rate of increase was down from 31%, this was largely due to a slower rate of increase for directors’ and officers’ insurance.
Inflation for insurers also remains a concern and is already impacting claims in several lines of business.