Hard market moderating in cyber: WTW, Aon

The hardening cyber market is moderating as London market insurers are placing an increased focus on sustainable pricing rather than defaulting to rate increases.

The availability of insurance capacity within the first $/£/€50 million increased in the second quarter compared to the first quarter of the year, particularly for the segments most attractive to the market, WTW said. More capacity is expected to follow in the third quarter, generating increased competition.

By Aon’s calculations, cyber insurance prices rose more than 30% year over year in the second quarter.

Across the board, the message from London market underwriters is that buyers will need to show a good level of risk control to secure capacity. 

In particular, insurers are keen to understand the business impact of ransomware attacks and extortion demands. WTW and Aon are warning buyers that additional written submissions are required.

However, carriers are loath to deny coverage to the best risks. Some clients even received a pricing reduction compared to 2021, WTW said, particularly in those sectors where capacity has increased.

In other cases accounts have received increases of 50% or more. As a result, an increasing number of clients are considering increasing their level of self-insured retention.

Fortunately, dire warnings about the impact of the Russia-Ukraine war on global cyber security have not come to pass, as hackers from those countries seem to have turned on each other instead of attacking targets who are typically the clients of London market insurers. 

However, some suspect that attacks could once again increase as the war drags on.