In a recent update on the European cyber insurance market, Macarena Bandres, Cyber Placement Leader at Marsh Europe, highlighted significant developments indicating a more favorable landscape. Speaking at Marsh’s Europe Cyber Market Update, Bandres noted a notable increase in capacity per layer, overall capacity growth, and the removal of coverage restrictions. She emphasized that underwriters are increasingly flexible and creative, providing more capacity with fewer restrictions, reflecting a growing comfort with the information they receive.
Bandres also addressed the rise in both frequency and severity of cyber claims, particularly ransomware incidents, a trend expected to persist. Despite this, she reported a decrease in cyber insurance rates for the second consecutive quarter. Bandres expressed satisfaction with the fact that 60% of Marsh’s clients received premium discounts in Q2, doubling from Q4 2023.
“The average decrease in premiums was -7% in Q1 2024 and is expected to be around -10% in Q2 2024,” Bandres commented, cautioning that final figures might slightly vary. This decline follows a period of increasing premiums throughout 2021 and 2022, marking a significant shift in market dynamics.
Marsh’s observations also highlighted improved cybersecurity controls across industries from 2021 to 2023, contributing to the market’s softening. Bandres stressed that insurers continue to prioritize robust cybersecurity measures, correlating improved controls with lower premiums.
“As clients enhance their cybersecurity posture, market capacity and competition increase, resulting in lower premiums,” Bandres explained. Larger companies with revenues exceeding €250 million and effective cybersecurity measures have seen more substantial premium reductions. Conversely, smaller firms, which faced relatively stable premiums during hard market phases, have experienced less dramatic decreases due to their lower starting premium levels.
In conclusion, the European cyber insurance market is witnessing expansion in capacity, enhanced flexibility from underwriters, and decreasing premiums, driven by improved cybersecurity practices across businesses of varying sizes.
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