While Cyber Insurance Prices Decline, Watch Out for Terms and Conditions
Cyber-security is the most concerning risk for companies, said presenters and attendees at the 2023 International Risk Management Institute construction conference.
Photo: Richard Korman for ENR
Cyber insurance prices that in some cases doubled in 2021 and 2022 now have been declining for a year because of improved cyber defenses and new insurers entering the market. Amwins, a specialty brokerage, is the latest of many companies to issue a report citing the price decline.
The drop in prices has also been noted by Moody's, the debt rating agency, and Munich Re, the big reinsurer.
But watch out for the terms and conditions, which still vary widely.
Since early 2023, Amwins stated in a report released Sept. 10, "many insureds have seen a reversal of fortunes from the hard market with decreases in premiums of 30% or more, depending on the size and complexity of the risk."
Capacity has increased, Amwins states, both from new entrants as well as existing carriers showing a willingness to offer up to $10 million.
A leveling or slowing of the price increases began unfolding in 2023, although some reports mentioned that cautious insurers in the still-evolving cyber insurance market segment were careful to exclude certain risks and that some insurers set sublimits on specific causes or coverage or coverage triggers.
Now, Amwins reports, terms and conditions have improved and insurers are more willing to eliminate sublimits and coinsurance, including on ransomware. The company said it is "seeing higher sublimits for cybercrime including phishing and social engineering as well as reputational harm loss, dependent business income loss and dependent system failure."
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Despite the overall improvement in terms, conditions and pricing, insurance buyers "should be aware that not all cyber forms are created equally. "
"While the current product may seem to be commoditized (especially compared to its early days)," Amwins wrote, "new and recycled coverage variations and restrictions are entering policy forms buried deep within the wording" and that some "inundate their quotes with restrictive endorsements and exclusions."
