US cyber rate increases reached 48% in Q3: Marsh

Cyber insurance rate increases soared by 48% in the US and by 66% in the UK in the third quarter of the year, according to broker Marsh. 

The 48% increase in the US represented a deceleration compared to the 79% increases recorded in the second quarter of the year.

Top cyber brokers are privately suggesting that rate increases have reached a peak, and are now likely to plateau and even start falling in some cases.

Marsh said that the cyber market is experiencing increased competition, as insurers are increasing capacity, especially for insureds with strong cybersecurity controls. 

The cyber insurance market has recently become more attractive for carriers for a host of reasons. These include higher retention levels, upward rate movements in 2021, and a reduction in claims frequency over the past six months.

Higher interest rates have also led to insurers seeking top line growth.

However, Marsh has warned that cyber risks could yet become more pronounced. It noted that the Russia-Ukraine conflict may have temporarily paused ransomware attacks by disrupting the many cyber hackers based in the region. 

Some fear that when the conflict ends, those criminal gangs could once again turn their attacks again towards the West.

The slowdown in pricing in Continental Europe was even more pronounced, with cyber insurance prices up only 40% in the third quarter (compared to 48% in the US and 66% in the UK).

In Europe, insurers continued to seek retentions in many instances, and they remained concerned around systemic exposures and accumulation risk.

In the Asia, Pacific, and Latin America and Caribbean regions, cyber insurance remained “challenging”, Marsh said. 

In the LatAm and Caribbean region, appetite and capacity from international markets increased for regional cyber risks - mostly excess capacity.

In the Pacific region, cyber insurance began to “stabilize” in the third quarter as insurers sought to grow their business in this area. 

In Asia, rate increases of 25% or more were experienced by some clients. Concerns continued regarding claims, systemic risk, geopolitical tensions, and ransomware.