The Cyber Insurance Market: Softening or Still At Risk?
The Cyber Insurance market is competitive. Last checked in 2021 and 2022, it had seen a significant increase in prices but is now showing signs of softening, especially with companies seeing lower premiums and more competitive coverage. A soft market refers to insurers competing very aggressively, which in turn leads to reduced prices and expanded coverage options. A hard market refers to the vice versa, due to which many businesses have lowered their coverage.
Industry leaders at the Zywave Cyber Risk Insights Conference shared various perspectives on the evolving market. As per the executive vice president of CRC Cyber, Florence Levy, the market may remain softened for a while. However, insurers may face rising cyber threats, cautioning that this change is likely to impact insurers. Furthermore, as noted by experts like Petra Strojilova of WTW, businesses are now increasing their coverage limits with the softening of the cyber insurance market and lower premiums.
On another note, Michelle Chia, the chief underwriting officer for cyber at AXA XL, seemed to be skeptical about a fully soft market. As per her findings, even though the frequency of claims may have decreased in some areas, insurers remain cautious due to the high risk of cyber threats.
Even though the premiums may be falling, the overall shape of the market is still being shaped by cyber incidents. According to reports, organizations such as Change Healthcare and Delta Airlines were victims to costly cyberattacks – but did not have cyber coverage. Such events are still ongoing and could pose a threat to the insurers, affecting their profitability.
Experts also suggest that a few cyber incidents, like the CDK Global Breach or CrowdStrike outage with Delta Airlines, are still causing problems and acting as a threat to insurers’ profitability in the long run. Even though the number of claims has stayed the same, the future has a chance for bigger problems.
As experts are anticipating, significant changes in premiums would take time – with prices likely to level out around mid-2025. As of now, the Cyber Insurance Market is quite a tricky area to talk about, with balancing lower premiums due to increased competition and the rise of cyber threats in the market. The risks remain to be high, and profits are likely to reduce in the coming future. However, we hope for the best for all – insurers and the insureds.
For expert advice, contact Shayne Bevilacqua at Professional Liability Insurance Group.
Call or Text us at +1 (877) PLIG – 123, That’s (877) 754 – 4123.
