27th July 2022

S&P report highlights the rocky road to a mature cyber insurance market

Cyber insurance is the fastest-growing subsector of the insurance market, though much of the recent expansion has been driven by substantial rate adjustments rather than increases in the size or volume of contracts, S&P Global Ratings said in a report published this week.
"That market dynamic reflects a growing number of (re)insurers' hesitancy to underwrite large cyber risks (and some providers' reduced risk appetite) due to more frequent and severe cyber attacks, and greater systemic risk", S&P Global Ratings analyst Manuel Adam wrote in "Cyber Risk In A New Era: The Rocky Road To A Mature Cyber Insurance Market."
The need to continually re-assess evolving cyber risk exposures is a challenge that will likely mean that dynamic contract conditions will prove an enduring characteristic of the cyber insurance market. That, in turn, heightens the need for policy clarity, with precise wording, which will be key to sustainable underwriting of cyber insurance.
"We believe an overly aggressive expansion into the cyber insurance market, without effective risk controls, could be detrimental to insurance companies' risk exposure, their capital position, and their earnings," said Adam.

S&P Global Trends(555 articles)
Cyber Trends(1,305 mentions in Insurance Newslink)

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