8th June 2022
Key findings include:
1.Swift pricing increases in the third and fourth quarters of 2021. The cyber insurance market is now focusing on addressing systemic risks within the cyber portfolio. But efforts to tackle this with exclusionary language have caused further frustration for clients. The ongoing Russia-Ukraine conflict is also creating significant concern that cyberattacks may intensify as the crisis deepens.
2.Cybersecurity controls are key. Insurers are focusing on the controls that organisations have in place to improve their cyber resilience such as MFA, cyber incident response planning and digital supply chain risk management.
3.Multiple factors driving clients to seek cyber insurance. The COVID-19 pandemic and the rapid adoption of remote working technologies were key drivers of businesses (re)evaluating their approach to cyber risk in 2020. Increased media coverage around cyberattacks, board-level pressure, and clarity around ‘silent cyber’ also led to organisations reviewing their cyber exposure.
4.Industry breakdown: Increased technology adoption and the associated heightened cyber risk has led to a significant increase in insurance buying by power and utilities and manufacturing companies. Purchasing by more traditional buyers, such as retailers and financial institutions, has declined mainly due to capacity reductions and higher rates.
5.Average limits down as market conditions deteriorate. The aviation sector—including airlines, airports, and aviation manufacturers—experienced the most significant limit reductions—a drop of 19%, from a £120m average in 2020 to £97m last year—while limits in communications, media, and technology CMT) were down 15%, from a £97m average in 2020 to a £82m average in 2021.
6.Data breach continues to be main driver of claims in the UK. Data breach and ransomware incidents continued to be the most common type of cyberattacks in 2021. Although data breach attacks have witnessed a slight decline, ransomware events increased again in 2021. The healthcare industry, CMT companies, and financial institutions are driving cyber losses, accounting for 58% of losses between 2015 and 2021.
7.Triple-digit price increase in fourth quarter of 2021. Starting in the first quarter of 2021, over 90% of organisations that buy insurance through the London Market experienced an increase in cyber insurance pricing. By the fourth quarter, that rose to 98%.
8. Outlook: Increased pricing for cyber coverage, lowered capacity, and more stringent underwriting have become consistent trends across the past couple of years, and continued to affect insureds’ cyber programmes in the first quarter of 2022. As we look ahead at the rest of the year, we expect to see the cyber insurance market affected by four major trends: underwriting, limits, price and coverage.
Marsh McLennann Trends(831 articles)
Cyber Trends(1,283 mentions in Insurance Newslink)