Markets in Focus
The Cyber insurance marketplace was categorized as “soft” from 2016 to 2020. During that time, a high volume of new market entrants and a lack of historical loss data for actuarial analysis resulted in customarily flat rates year over year.
The primary purpose of cyber coverage is to provide a financial backstop resulting from network security failures and privacy breaches. Over the past eighteen months, we have seen a dramatic change driven by ransomware claims. Those claims have increased in both frequency and severity, causing substantial operational disruption to insureds.
Ransomware attacks are occurring in all industries and at all company sizes, not just the usual privacy targets that have a high amount of confidential information. The result is a Cyber insurance market in transition, with most Cyber carriers re-assessing their underwriting and pricing strategies.