Continued Cyber: Market Growth 2024 Now
Moody’s, Amin’s Expect Continued Cyber Market Growth
Recently, two firms voiced hope that the weakening cyber market, which first appeared in 2023, will continue to be advantageous.
Moody’s Ratings and Am wins Brokerage provided perspectives on the industry environment in different reports.
According to Moody’s, the market is “positioned for noteworthy expansion over the next several years as cyberattacks continue to escalate in quantity and complexity with the potential to cause.
Renewals “are often coming in at level or below expiring pricing, despite increasing claims activity,” a shift that offered buyers more advantageous conditions.
Better capacity from both new players in the market and established carriers growing their offerings—which include limits as high as $10 million—is what is causing this move.
“serious harm to finances and reputation and disruption of business operations.”
Am wins.
Munich Re estimated in April that approximately $14 billion was paid in premiums for cyber insurance worldwide last year. By 2027, estimates indicate the figure will almost double to $29 billion.
According to Moody’s, increased demand and higher rates caused the direct cost of cyber insurance in the United States to more than treble between 2018 and 2022.
According to reports, that tendency reversed in 2023; while premium volume stayed unchanged, the overall number of policies increased.
Cyber insurance has evolved into “an essential component of comprehensive risk management,” according to Matt Donovan, executive vice president at Am wins.
An insured “may be able to obtain cyber insurance coverage of between $750 million and $1 billion on a per-risk basis,” according to Moody’s.
However, the cyber market only makes up a tiny portion of the whole property and liability insurance market.
Moody’s estimates that less than 1% of direct written P/C premiums in the US are made up of cyber insurance.
According to the credit rating agency, the top five businesses in the U.S. cyber market share are Chubb (8%), AXA (6.8%), Fairfax (6.4%), Travelers (5.4%), and Tokyo Marine (5.3%).
There are about $5.5 billion in direct premium written by the top 20 companies. That amounts to almost 76% of the total cyber-DPW in the United States, or over $7.2 billion.
Am wins noted mitigating variables, such as defense hardening and a drop in payments that can be linked to “enhanced cyber resilience,” which includes both defense against and recovery from attacks, even as ransomware claims grow.
According to Am wins in the research, the industry is closely monitoring the rise in class action litigation including wiretapping, unauthorized surveillance, pixel tracking, biometrics, and California Privacy Act allegations.
“A deluge of class action privacy lawsuits related to these areas,” the brokerage reported.
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