Market Conditions

Due to refreshed capacity and carrier growth strategies, competition has increased in 2023, primarily for risks exhibiting best-in-class controls. The impact of competition has lessened in the second half of the year, but the potential exists for 0-15% decreases compared to rates in 2022, specifically for companies with significantly improved controls. The possibility of increases continues for companies that have yet to demonstrate year-over-year improvements to IT security controls or those with recent incidents. Regarding coverage, carriers are willing to engage in discussions for enhancements, and there is flexibility in amending forms.

Claims

The level of cyberattacks is rising after declining throughout the second half of 2022 and early this year. Ransomware negotiator Coveware notes that the percentage of companies paying a ransom demand has decreased significantly over the past year. However, when ransoms are paid, the amount being paid has notably increased.

Capacity

• Carriers are offering expanded capacity in the U.S. and London, fostering competition on programs with quality controls
• Some markets have increased their available lines, and there are new entrants to the Cyber market

Premium

• Anticipate savings for entities maturing their IT security controls and possible increases for insureds with recent losses or less than fully mature IT security
• There is continued pressure on carriers to reduce Increased Limit Factors (ILFs), driving down overall prices for multi-layer programs
• Significant opportunity for competition on rate and considerable savings from 2022 for those with best-in-class controls

Retentions & Coverage Restrictions

• Some markets are willing to reduce retentions and waiting periods from attachments that increased in past years
• Retentions are driven by revenue and industry
• Potential increase to sub-limited coverages and added enhancements
• Pixel tracking has the focus of underwriters. Coverage may be excluded if appropriate governance is not demonstrated by insureds
• War exclusions continue to be revised by carriers
• Wrongful collection of information, biometrics and cyber crime coverages remain limited

Cyber Team