A report by major insurance broker Marsh has found that cyber insurance rates and prices in the US declined for the second consecutive quarter in Q2 2017.
According to the report, US cyber insurance rates decreased 1.5% on average during the quarter, while in Q1 2017 cyber liability renewal rates declined by 1.7%. This marks the first time since 2012 that average cyber rates have declined for two consecutive quarters.
Marsh believes that one of the contributing factors to this decline is the increase in capacity due to the expansion of risk appetite from existing cyber markets. Another factor identified is the entrance of new insurers in the product area.
Search and compare product listings for Cyber Insurance from specialty market providers here
“It remains to be seen whether this attention to cyber risks will potentially be detrimental in future, as the limited underwriting opportunities mean that prices are declining perhaps more than would be advisable,” Reinsurance News
commented on the report. “This could result in higher combined ratios for cyber underwriters, which in the long-run could alleviate some of the pricing pressure.”
The report indicated that cyber liability insurance rates peaked during Q2 2015, at 20.0%. That year, Ashley Madison was the target of a data breach that exposed 37 million clientele records, and health insurer Anthem revealed that over 80 million patient and employee records were compromised due to malware.
How insurers need to change as cyber threat evolves
Could insurance be driving force for cyber standards?