Cyber insurance pricing has witnessed a 2% global decrease in the third quarter of 2023, marking the initial average downturn since the latter half of 2018, as reported by insurance broker and risk advisor Marsh, a subsidiary of Marsh McLennan.
The report comes in contrast to the 1% increase recorded in Q2. The broader findings from Marsh’s Global Insurance Market Index revealed a sustained 3% increase in global commercial insurance prices during Q3, maintaining the trend from the previous quarter and marking the 24th consecutive quarter of pricing upticks.
Despite a general consistency in pricing across regions, the decline in cyber insurance rates was attributed to ongoing rate reductions in financial and professional lines, although it was partially counterbalanced by property insurance increases, notably a 14% surge in the US.
In a public statement issued earlier this month, regarding mitigating the risk of cyber, Marsh said: “Cyber risk has grown exponentially in recent years as more sophisticated and persistent cyber attackers continue to target the ever-increasing number of technology-reliant organisations in different industries around the globe.
“The rise in the number of claims, together with a more hazardous risk landscape, has led to higher cyber insurance rates and increased underwriting scrutiny. And while Marsh data shows that cyber insurance take-up rates have steadily increased in the last several years, there is still a widespread misunderstanding about the value of cyber insurance and questions about the process to secure coverage.”
The report also outlined pricing variations across the US, Latin America, the Caribbean, Europe, the Pacific, Asia, the UK, Canada, and India, the Middle East & Africa. Marsh’s additional insights covered trends in global property and casualty insurance pricing, as well as fluctuations in financial and professional lines.
Speaking about the findings, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said, “After years of increases, even a modest reduction in cyber rates will be welcomed by clients and in large part is recognition of the hard work they have done to improve their cyber resilience. However, the property market – and property catastrophe in particular – remains challenging and is an area of focus of our work with clients.
Donnelly added: “In an uncertain geopolitical and economic environment, we are exploring a wide range of risk mitigation options with clients that can help them to manage the broad range of risks they face, build greater organisational resilience, and gain positive outcomes from insurers at renewal.”
Author: Joanna England
