US cyber rates decelerating, Marsh says

US cyber insurance rates have decelerated nearly 80% on average in just six months, according to Marsh. 

“Three quarters into 2022, the market is clearly showing signs of improvement”, Marsh wrote, citing new capacity entering the market and better cyber hygiene on the part of insureds. 

The broker also said that existing carriers are improving their risk engineering and risk management capabilities.

Finally, there is now better communication between governments, law enforcement, corporations, and the insurance industry.

“The outline of a more stable market on the horizon is becoming clearer as time passes,” Marsh wrote. “We are optimistic the market will continue to build on this momentum and continue on its path toward stabilization.”

By July 2022, average rate increases had steadily declined to 54%, down from average increases of 133% in December.

Confidentially, some brokers have told CyberInsurer.com they are budgeting for rate decreases in 2023.

However, Marsh has complained that carriers’ actions “lack coverage clarity, contract certainty, and insight into pricing mechanisms”, causing confusion for buyers.

“When insureds do not feel like they are provided with clarity, transparency, and coverage certainty, their confidence in and comfort working with the cyber insurance market declines,” Marsh wrote. “This occurs even as the product continues to prove to be effective in protecting balance sheets, paying claims, and enabling organizations to responsibly understand, measure, and manage cyber risk.”

And carriers continue to scale back or not offer ransomware-related coverages if a client has demonstrated poor controls in managing cyber risk.

Carriers are also reviewing aggregation lists and consider sublimits for certain perils, as well as territorial exclusions, based on ongoing geopolitical conflicts.