Cyber Market Update - Q3 2021
Notable Updates in the Cyber Marketplace
Q3 2021: A Tipping Point?
The cyber insurance market is experiencing severe conditions. According to some reports, ransomware events are up 300%. After the Acer and CNA events, demands are now regularly in the tens of millions of dollars. With this level of increased frequency and severity, major markets are pulling back capacity while some carriers are no longer writing any new business. Certain carriers have pulled out of the cyber market entirely. 2021 will prove to be a tipping point for the market to correct and offer a sustainable product, or more dramatic changes will be necessary.
Focused on smaller and middle-market insureds, InsurTech’s approach to underwriting is winning the cyber race and has resulted in loss ratios well below the industry average. Going forward, similar approaches will need to be deployed in the large account space. Cybersecurity maturity, disciplined underwriting and adoption of quantification analytics to differentiate one insured from another will be key to building large cyber insurance programs that are priced efficiently and sustainable over the long term.