As the frequency and sophistication of cyber attacks has increased, there is mounting pressure on insurers to increase rates and underwriters to be more selective with risks.
An increase in the severity and the rising number of ransomware attacks is seen as one of the biggest challenges for the cyber insurance market. There is a consensus in participants that rates will need to rise with a correction in certain segments which have been underpriced in previous years. This may also be accompanied by adjustments to underwriting terms.
In the past, buyers were able to renew their insurance with little information required, however, they will have to work harder now. They should take this opportunity to improve and articulate their management of their risk positions to achieve the best terms possible.
The growth of ransomware and other threats have not made it easy on carriers. They will need to keep up and improve their technical expertise to enable clients to protect themselves from cyber crime.
“This year we’ll see a shake-up in the market in terms of who wants to continue to write cyber as a class of business and to do so in a meaningful way, providing a service that clients will want to buy,” Lindsey Nelson, Cyber Development Leader at CFC Underwriting said. “The best positioned cyber insurance markets who will be long term partners will be those who continue to invest in their in-house cyber claims infrastructure, where there is a mutual interest in ensuring claims are handled effectively without incurring unnecessary costs. Luckily, cyber insurance is one of the few lines of insurance where we can work to prevent claims before they happen, providing clients with proactive threat alert scanning from the first day of binding.
Ransomware will continue to be one of the biggest threats to UK businesses in 2021, and as the cyber market continues to look for rate and react to the severity of these losses, the cyber providers who have the size, scale and expertise in the market are going to be best placed to be a consistent and stable solution placed to be a consistent and stable solution for clients.”, Nelson added.
At Towergate, we know capacity is available and will work hard to secure the best cover and terms. Clients need to make sure they have expert insight into the market and that comes with having the right broker so they can make sure the market can work to their advantage.
Cyber insurance from Towergate
Towergate are actively engaging with insurers and our clients to obtain cyber protection for businesses of all sizes, to protect against the very real and growing threats of the digital age. We can offer cyber insurance for businesses to help protect you should the worst happen.
Get a cyber insurance quote online.
About the author
Mark Brannon Cert CII is a respected industry leader with over 17 years’ industry experience in a variety of roles within the business insurance sector. He works across a wide spectrum of insurance product and policy development, delivery and optimisation for clients, including claims, insurer relationships, marketing and communications, and risk management.
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The information contained in this bulletin is based on sources that we believe are reliable and should be understood as general risk management and insurance information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such. If you wish to discuss your specific requirements, please do not hesitate to contact your usual Towergate Insurance Brokers adviser.