As the cyber insurance market stabilizes, the number of clients buying coverage continues to increase. Read on to find out why — and what comes next.
Despite the challenges in the cyber insurance market over the past two years — which included steep pricing increases, tighter terms and conditions, and intensified scrutiny from underwriters — the percentage of clients buying coverage continued to climb in 2022. Looking back on 2022 and ahead into 2023, we see a number of trends, including:
- Cyber insurance pricing increases moderated for the fifth consecutive quarter, rising 11% on average in the US in the first quarter of 2023, compared to 28% in the prior quarter.
- The largest companies, those with greater than $1 billion in annual revenues, continue to be far more likely to purchase cyber insurance.
- Innovative, data-backed analysis allows clients to better understand and prioritize the impact of cyber risk controls.
- Over the past two years, many cyber insurers have focused on potentially catastrophic cyber risk, including fallout from geopolitical conflicts and corresponding nation state activity, changing policy exclusions, and the possible impact from single points of failure.
Effective March 31, 2023, Lloyd’s of London mandated new war exclusion wording inclusive of language to manage systemic loss. Marsh continues to question insurers on clients’ behalf regarding the approach to war and cyber catastrophic risk.
Concurrently, cyber risk management is being driven by advances in predictive aggregation models, improved cyber hygiene, ways to prioritize investments, greater information sharing between private and public entities, and increased government actions in support of a cyber resilient society.
As these forces shape the future state of cyber resilience, it’s important to understand the role of cyber insurance, including purchasing trends.