Underwriting cyber risks remains ‘time consuming and demanding’, according to the broker
Cyber insurance policies in the UK continued to experience “very significant rate increases” throughout Q1 2022, according to research by broker Aon.
In its Q1 2022 Global Market Insights Report, published yesterday (23 May 2022), Aon said that market conditions for cyber insurance remained challenging, “with geopolitical events in Eastern Europe serving to exacerbate and complicate the landscape”.
Cyber was the only insurance class where Aon saw rate increases of over 30% in Q1 this year. Automobile, casualty and liability, property and employers’ liability all saw smaller rate increases of between 1% and 10%.
The report added that underwriting for cyber risks remained “time consuming and demanding” while rate increases and capacity reductions continued.
Capacity for cyber cover was also constrained in the UK during the first quarter of the year, said Aon.
The report explained: “The overall pool of risk transfer capital continued to decrease due to the global focus among insurers on reducing aggregate limits. This has been felt even more keenly at Lloyd’s, where some syndicates have been constrained on premium income growth through the business planning process.”
While cover was stable overall for cyber insurance throughout 2022’s first quarter, deductibles were increased and limits were decreased. Underwriting was also described as “more rigorous than ever”, with many underwriters requiring evidence of risk improvement measures as a prerequisite to providing renewal quotes.