Cyber rate hikes slow in US and Europe: Marsh
Marsh said the moderation in rate increases was largely down to greater competition in the market
US cyber rates increase 48% in third quarter, down from 79% in the previous quarter, amid increased competition for good risks
The growth in cyber rates slowed in most regions globally as new capacity entered the market, a new survey by Marsh has found.
Globally, cyber insurance pricing increased 53% in the third quarter, according to Marsh's latest Commercial Insurance Market Index.
But in the largest insurance markets, the pace of increase declined. In the US, rates were up 48% in the third quarter of 2022, down from 79% in the previous quarter.
Similarly, rates increased 40% in Europe and 66% in the UK, compared to 50% and 68% respectively in the previous quarter. UK cyber rate growth peaked at 102% year on year in the first quarter of 2022.
The moderation in cyber rate increases was largely down to greater competition in the market, with more insurers offering increased capacity for insureds that could demonstrate strong cyber security controls, Marsh said.
Higher rates and retention levels have encouraged more capacity into the market, while markets like the US have also seen a reduction in the number of claims, the broker added.
However, this was not the same for all regions. Latin America and Asia both continue to experience challenges in the cyber market, including capacity issues and concerns over the risks posed by cyber threats.
'Ongoing inflation and geopolitical instability are affecting all sectors and we expect even more challenging conditions [for insureds] in the already strained property catastrophe market following Hurricane Ian'
Marsh Specialty and Global Placement
In Europe, insurers are also still concerned about systemic exposures and accumulation risk, Marsh said.
Overall, global commercial insurance prices across all lines increased 6% in the third quarter of 2022, down from 9% in the second quarter, continuing a trend of moderating rates that started in the first quarter of 2021.
This was driven by a decrease in rates for professional lines, notably directors' and officers' insurance, seen across most regions.
Property insurance pricing saw a global average increase of 6%, steady on the previous quarter, while casualty pricing increased 4% on average, down from 6% the previous quarter.
Lucy Clarke, president of Marsh Specialty and Global Placement, said the global business environment remained tough.
“Ongoing inflation and geopolitical instability are affecting all sectors and we expect even more challenging conditions [for insureds] in the already strained property catastrophe market following Hurricane Ian,” she said.