What is the state of the cyber insurance market, right now? 'Very unhealthy'. That's the verdict of C3 Risk & Insurance Services' Joe Erle as he talks to Insurance Business TV in the latest Peer to Pier interview. He also speaks on the biggest risk gaps and where the market is heading over the next few years.
00:13 Hello everybody. Welcome to Insurance Business TV. We are here at Insurance Fest 2026 for another of our peer-to-peer interviews. And I am now
00:20 with Joe Earl. He is the Cyber Group Practice Leader at C3 Risk and Insurance. So, no surprises, Joe. We're going to talk a little bit about cyber
00:29 today. How would you describe the current state of the market? Would you say it's softening, hardening, or somewhere in between?
00:35 The cyber insurance market is very unhealthy. Okay.
00:41 Because we're getting year-over-year increases in claims, but prices have gone down for 11 quarters. So, I would
00:50 rate the market as unhealthy, ready to turn at any moment.
00:55 Okay, that's worrying signs for our audience there. Our customers, a lot of them are with excess and surplus and
01:02 they may see one year it looks great for their cyber premium and then the next year we could see double-digit
01:10 increases coming up in the next couple years. Well, let's talk a little bit more about those customers if we can. What is the biggest gap perhaps between the risk that
01:18 clients actually face and the coverage that they actually have?
01:22 Right. I think when most people buy cyber insurance, they think, like, this is insurance for when I get hacked. Yeah.
01:29 But one of the biggest risks that is emerging right now is privacy claims.
01:36 I think AT-Bay said 70% increase in pixel and wrongful collection lawsuits.
01:42 So we have these class action lawsuits, like Kado just settled one for $1.8 million a little bit while back. Kaiser settled one for $48 million.
01:54 So we're seeing large double-digit losses in pixels, and different companies are handling it different
02:02 ways. Some people are covering it under their wrongful collections. Some people are giving wrongful collection but excluding pixels, and others are excluding it altogether.
02:12 Right. And let's, of course, we got to talk about AI as well. Well, I think it's really interesting from a cyber perspective because it's both an attack vector but also potentially an
02:21 underwriting tool as well. So, just give us a little bit of insight in terms of how you're using AI in your day-to-day.
02:27 Absolutely. AI is a great research tool.
02:31 You can find out so much about a company just by typing their information into AI. And I think underwriters are using that, but they're using that on
02:39 steroids. They're using some really great tools that are also utilizing AI.
02:44 And I also think that the cybersecurity companies in general have adopted AI because AI moves so quickly. It moves
02:53 much faster than a human can. So the only way to defend against a cybercriminal that has AI is to have cybersecurity that also utilizes AI.
03:02 Yeah. Yeah. Makes a lot of sense. And of course, AI was perhaps the talk of the next few years, generally speaking, but it's here now. So, just give us
03:10 your overview of the cyber market in the next few years. Where do you see things going, and what will change?
03:14 Well, we talked about how I see prices increasing in the next couple years.
03:19 I think by 2030, we're going to be at like a $30 billion market cap.
03:23 I think that's kind of the consensus, but I think that cyber insurance is going to be changing as far as, like,
03:31 we're going to have more exclusions. There's going to be more carve-outs, and then there's going to be more intricate
03:39 policies to cover certain silos like pixels or privacy. And then we're going to have some emerging claims like AI
03:47 discrimination, which are kind of like part employee practices liability, part AI liability, where we're
03:55 going to have to have combo policies or some individual product.
