Don’t Expect the Buyer’s Market for Cyber Insurance to Last – RPS | Insurance business America
Agents should prepare for stabilization – or even rate increases
According to a report from Risk Placement Services (RPS), while there was a buyer’s market for cyber insurance in 2023, this trend is unlikely to be sustainable due to rising claims.
Agents should prepare for stabilization or even rate increases, RPS warned.
In 2023, “insurers began cutting rates again after less than a year of favorable claims data,” said Steve Robinson, national cyber practice leader at RPS. “Many of these were newer players who were used to huge revenue from skyrocketing interest rates and higher policy utilization.
“Investors who had backed some newer players in 2019-2022 wondered why their investments were no longer growing as quickly, and markets responded by cutting interest rates to gain market share – but that went against everything the market was expecting for the past three years,” Robinson said.
Outlook results
Due to the volatility of cyber threats, cyber insurance differs from the overall P&C sector, RPS said.
“The threats facing cyber insurers are constantly changing in unpredictable ways, and that means the market must adapt quickly,” Robinson said.
The study also found that manufacturers and other industries with a high risk of business interruption are facing increased underwriting scrutiny.
“The most difficult sectors to place coverage, particularly for larger risks, are manufacturing, contractors, municipalities and anything in financial services,” said Nick Carozza, senior vice president at RPS.
RPS warned that brokers should inform their customers that the low premiums currently offered could change slightly at the next renewal.
“It’s just not sustainable,” said Dillon Behr, RPS division vice president.
The study also found that while insurers have historically mandated screening processes for insureds seeking higher levels of coverage, market dynamics are currently changing.
“Some airlines are now a little more flexible, especially for small businesses,” said Kunal Mallik, area assistant vice president at RPS.
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2024-02-02 15:38:44
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