Global cyber rates increased 1% in Q2: Marsh

Globally, cyber insurance pricing rose 1% in the second quarter, compared to 11% in the prior quarter and 28% in the fourth quarter of 2022.

Cyber rates increased in certain regions while moderating in others, according to the most recently published index by broker Marsh.

In the US market - the biggest in the world, cyber insurance pricing dropped by 4%, compared to an 11% increase in the second quarter of 2023. The decline was primarily driven by the premium reductions in excess layers.

Prices fell because of increased competition, improved cybersecurity controls, and a reduction in ransomware attacks in 2022 were key factors behind the continued pricing improvement. 

However, Marsh noted an increase in the number of ransomware claims reported in the second quarter of 2023.

Coverage for US insureds generally continued to broaden, including in some instances removal of coinsurance requirements and increased sub-limited coverage enhancements. Insureds with improved cybersecurity controls were generally able to negotiate lower retentions.

In the UK, pricing trends were very different, with rates rising 11% in the second quarter, compared to 10% in the first quarter of 2023. 

Larger organizations served by the UK market generally experienced more modest pricing increases compared to smaller companies.

In continental Europe, cyber insurance pricing continued to stabilize, increasing 3%, compared to 5% in the prior quarter. The European market benefited from the fact that there are generally few privacy claims in Europe, a decrease in ransomware claims (in both frequency and severity), and new capacity. 

However, clients remained concerned regarding exclusionary language on war, developed to comply with the new Lloyd’s mandate regarding all Lloyd’s capacity since March 31, 2023.

In Asia, cyber insurance pricing increased 8% in the quarter, the same as in the prior quarter as new market entrants increased competition.

In Latin America and the Caribbean, cyber prices rose 12% in the second quarter, compared to 15% in the prior quarter. Marsh noted that demand for cyber insurance in the region continued to fuel an increase in capacity.

In the Pacific region, cyber insurance pricing increased 8%, compared to 25% in the prior quarter.