Cyber risks focus for captives
Some cyber insurance buyers are facing premium rises of more than 400%, according to Airmic’s latest Pulse Survey on insurance market conditions. It also finds that cyber risks are the most likely new risks to be financed by captives.
According to Airmic’s report, released as the risk managers’ association’s annual conference kicks off in Brighton in the UK, remote working has seen a significant rise in cyber risks.
“The proliferation of ransomware attacks, in particular, has transformed the risk of data breach, through accessing sensitive information then held to ransom,” the organisation states.
The survey found half (53%) of respondents bought cyber insurance and three quarters (74%) were satisfied with the claims experience. Among those making a claim, all said the claim had been met, including those for ransomware. However, insurance buyers also fear that the cyber insurance market lacks the data, skills, and knowledge to effectively underwrite cyber cover.
Data breach and security advisers were the first organisations buyers would consult after a breach, rather than insurers or brokers, the survey found.
More than nine out ten (92%) said it was still a “hard market” for cyber cover.
Respondents were split in their view on the market next year, however: 38% expect a deterioration, 29% an improvement, and 33% expect it to remain consistent.
Finally, most of those questioned (69%) reported that their organisation had at least one insurance captive in operation. However, of those that didn’t, only 17% said their organisations were contemplating setting one up.
Julia Graham, CEO of Airmic, said: “Will Spring bring continued growth in the green shoots we are seeing? We not only see premium and cover green shoots, but a genuine effort from the market in building or rebuilding relationship bridges with our members. This overall scenario gives us some optimism for a better 2022.”
“This said, the market needs to energise its efforts to keep up with the opportunities available through technology and be conscious of more sophisticated use of analysis of data, and new risk financing models and mechanisms creeping up on out-of-date solutions with some internally-focused practices. Our members work with organisations which are harnessing technology, and the market needs to avoid falling behind them.”