Competition ‘returning to cyber market’: Howden

Competition is returning to the cyber market, with insurers willing to accept renewals in the single- to low-double digit rate range, Howden said in its January 1 report.

Insurers are also willing to increase limits, remove cover restrictions related to ransomware, and lower retention levels, the broker noted.

Buyers are taking advantage of the current market conditions by purchasing cover for the first time or, in the case of existing buyers, by increasing limits.

More capacity is entering the market, primarily via traditional carriers, but also insurtechs focused on the small- and medium-sized enterprise (SME) market. 

The easing market conditions reflect carriers’ underwriting actions taken during the hard market as well as customers’ improved risk posture towards ransomware.

The risk landscape

After a relative lull in 2022, ransomware activity returned to dominate the threat landscape in 2023.

Starved of funds following the drop in revenue in 2022, established gangs as well as new groups, drove the acceleration in frequency in 2023. There has also been a steady increase in US privacy claims due to increased biometric breaches and pixel litigation.

Over 2023, risk aggregation and systemic attacks remained areas of concern for insurers. As geopolitical tensions remained high, war exclusions took center stage. Risks are also thought to have risen following the outbreak of the Israel-Hamas war. 

However, better cyber defences have left companies less vulnerable to prolonged disruption or outsized losses in the event of a cyber attack, and as a result underwriting conditions remain strong.