Is there enough capacity for cyber insurance in the market today?
Oh, absolutely not. If you talk to any of the brokers here, you will recognize there's not anywhere near enough capacity to handle demand.
Basically, demand far exceeds capacity and there are a lot of good reasons. This is a very hard market for cyber. For many years the line of business has lacked the underwriting discipline, including terms and conditions in pricing, and lack of security, or cyber risk management that's absolutely needed to make this a profitable line for the industry.
How is the industry addressing cyber risks?
There has been a strong correction of the last two years: underwriting discipline, pricing terms and condition changes — a lot of insurers and reinsurers cutting back on the lines of business they put out. So there's a correction going on and a necessary one and strong price increases, which are continuing in 2022 to address the industry.
We as an industry have to go a lot further. Addressing the basic question of cyber hygiene, cyber risk management, in addition to those steps is absolutely necessary. That's part of the reason we launched Resilience Cyber Insurance Solutions to marry those two disciplines in the same value proposition.
How's the overall hard market impacting the cyber market?
It hasn't helped— it’s exacerbated the problem. We've seen here a hardening of the market in in multiple, if not all lines of property and casualty business. Cyber, arguably is leading the way and continuing. And while you may be seeing a general relaxation or plateauing in the other P&C lines, cyber is certainly increasing. But companies are not making enough money, or getting the return on capital they need on all their overall product. It's not going to help the lost leader for the industry for the most part, which is cyber, so it's made a lot worse.
Has the situation in the Ukraine impacted cyber?
We have seen an increasing number of cyber attacks that come out of places like Russia, and other nations if you will, sanctioned or a sponsored criminal cyber activity. While the entire world is prepared for more cyber activity coming out of attacks out of Ukraine, we actually haven't seen an increase in number in the last six weeks with all the war and everything's happened here. But it is giving us the opportunity to strengthen the cyber protection we give our clients working with the government and private industry, the insurance industry together to find a solution advising our clients and being very conscious in our monitoring of our clients activity of incoming attacks of what they can do to help prevent losses before they actually happen.
