Jose M Seara’s Post

Cyber insurance stays resilient! 💻🔒 For the 2nd year, U.S. cyber insurers report strong profits—even as premium growth takes a breather. 📉 Here's the scoop: Standalone cyber coverage kept loss expenses steady - a robust 44% in 2023, barely inching up from 42% the previous year. These numbers are testament to a savvy industry balancing premiums with smart risk selection. 👏 What's the secret sauce? Insurers demanded better cyber hygiene and risk management from clients. No shortcuts here - proper safeguards are now the golden ticket to coverage. 🎫✨ Yet, there's a twist. Premiums dipped 2% in 2023. From a three-year sprint with whopping 200% growth post-2020, the brakes were tapped last year. But don't be fooled; this isn't a crash, rather a sign of a maturing market responding to its own success. 📊 What's ahead for cyber insurers? They're not hitting eject on growth, but with eyes on sustainability, pricing might just cozy up to those profit margins. 🌱💼 Thoughts? Have we struck the right balance between growth and profitability? Chime in below! ⬇️ #CyberInsurance #RiskManagement #IndustryTrends

Two of the world’s biggest insurance players, Zurich Insurance and Marsh McLennan, just released a new report highlighting how cyber attacks are now as big a threat as terrorism and flooding, and, as the Financial Times explains, the private sector can’t handle these potential risks alone. These industry giants are pushing for public-private partnerships to share the financial blow from catastrophic cyber events, much like the flood and terrorism schemes we already have, but for the digital age. Last year, Lloyd's estimated that a major attack could cost the world economy $3.5 trillion, and that it was “too substantial a risk for one sector to face alone”. The cyber insurance market took in about $14 billion in premiums last year. Munich Re expects the figure to reach $29 billion by 2027. As cyber risks escalate, state-backed support might be the only way to keep premiums from skyrocketing and ensure that critical infrastructure remains in place. Because when a single cyber attack could slam into the global economy with that eye-popping scale of losses, we’re in uncharted waters. “At some point cyber events can potentially become large enough to move outside of the insurance industry and become societal,” said Thomas Reagan, global cyber practice leader at Marsh McLennan.  Read the full story: https://lnkd.in/gtRYg73U #insurance #cyber #hacking #risk #cyberattacks #insuranceindustry #premiums #economy

The U.S. cyber insurance line generated strong direct underwriting profits for the second straight year in 2023, but written premium volume has stalled amid renewed pricing pressure. Data compiled from cyber insurance supplemental filings in statutory financial statements indicates that for standalone cyber coverage the direct incurred loss and defense and cost containment (DCC) expenses ratio held relatively steady at 44% in 2023 versus 43% in 2022. Learn more: https://ow.ly/s5Et50Riza4 #FitchRatings #Insurance #CyberInsurance

Moody’s latest report highlights the significant impact of the CrowdStrike outage on July 19, attributing it to a flawed software update. The incident is projected to lead to substantial cyber insurance losses, particularly driven by business interruption. With economic losses estimated at $5.4 billion, insured losses are expected to range between $400 million and $1.5 billion. The complexity in determining final losses is exacerbated by the lack of standardization in cyber insurance policy language. This event underscores the interconnected risks in the economy, prompting insurers to reassess systems failure coverage and risk modeling practices. #CyberInsurance #BusinessInterruption #MoodyReport #CrowdStrikeOutage #RiskManagement #ITOutage #InsuranceClaims #CyberRisk #SystemsFailure #Reinsurance

Demand for cyber coverage again generated strong profits for U.S. property/casualty (P/C) insurers last year. However, weaker pricing led to the first decline in direct cyber written premiums since cyber-specific premium data were included in statutory financial statements. Learn more in our new U.S. Cyber Insurance Market Update: https://ow.ly/m0hA50RNXuV #FitchRatings #Insurance #CyberInsurance

Warren Buffett’s warning highlights growing risk of cyber insurance losses The United States cyber insurance industry continues to see strong profits, according to Fitch Ratings. Average premium increases, meanwhile, have moderated over the last three years: While 2021 saw a 34% jump in premium pricing and costs rose 15% in 2022, increases were under 1% in 2023. As noted by the Fitch Ratings report, “segment underwriting profitability at current levels is unsustainable as cyber insurance pricing is likely to remain flat or down going forward.” While this is good news for enterprises looking to limit the impact of cybersecurity incidents, cyber insurance providers are concerned about the uncertain costs that come with fully covering companies if networks are breached or data is compromised. The result? Words of warning from Warren Buffett: “You may get an aggregation of risks that you never dreamt of, and maybe worse than some earthquake happening someplace.” Berkshire Hathaway is the sixth-largest provider of cyber insurance policies in the United States. And while current policies are profitable, Berkshire’s top executive Ajit Jain says that total cyber losses are often hard to pin down. “The aggregation potential can be huge,” he says. “And not being able to have a worst-case gap on it is what scares us.” https://lnkd.in/dvJQMxnm #cybersecurity #insurance #risk #losses #WarrenBuffet

Cyber insurance remains a critical tool for managing risk, but it comes with its own set of challenges. Recent insights highlight three key recommendations for improving the effectiveness of cyber insurance policies: insurers should clarify security expectations, provide actionable lists of required practices, and offer incentives for adopting new standards. The key to reducing risk and minimizing loss lies in both providers and purchasers working together.

In 2023, the U.S. cyber insurance market saw slower growth, stabilized premiums, improved profitability, increased competition, evolving coverage, and a focus on proactive risk management. These changes indicate a maturing market adapting to evolving cyber risks and insurance needs.

A must-read for all #cyber insurers: An interesting view of the current insurance market following Howden recent report including a rather damming comment on the cycle 'Noticeably, the state of the insured does not figure' -i.e. rate changes are not necessarily reflective of insured's risk profile and cyber posture The market should take heed because, remember, this publication is read by risk and security professionals. Most recently I have heard so many large corporate clients tell me they no longer purchase cyber insurance because it does not protect the balance sheet risks they need protection for This seems at odds in a softening market driven by oversupply - but we all know, it's capacity over-supply for the more 'vanilla' risks; questionnaires are not adequate to underwrite these complex risks not being addressed That doesn't mean they are not underwritable, it just requires better cyber risk engineering data and gear-shift change, away from questionnaires to dynamic risk profiling. And that's exactly what Axio supports; assessment and scenario-based quantification, just like insurers already do for Property, Energy, Marine etc.... engineering If you want to break away from the pack, sustainably support your complex clients and differentiate in a less price-sensitive market, come and partner with Axio and the vanguards in the market RYSKEX Inc Axio : A Lloyd's -invested company DM myself or Peter Armstrong if you'd like to know more.....🧐🧐📧 https://lnkd.in/eMJPKzuD #insurance #cyberinsurance #cyberriskengineering

Great to see the second iteration of the Insurance Risk Monitor from OAC Limited - Member of the Broadstone Group published today. Bharat Raj provides this month's update on the cyber insurance market covering its growth outlook and key risks. Find out more about the recent growth of the cyber insurance market, the rating environment and the impact of geopolitical tensions in this piece from Reinsurance News https://lnkd.in/eyBK2a74