Cyber Insurance Predictions & Trends For 2023

Cyber Insurance Predictions & Trends For 2023

Cyber Insurance Predictions & Trends For 2023

6 Jan 2023

In 2022, Servca experienced our most successful year to date for Cyber Insurance programs, with exponential growth in risks that needed placement in the London market. However, we need to look into the future and determine the factors that will determine success in 2023.

Over the past decade, Cyber Insurance has slowly moved to the forefront of an organisations robust risk management strategy, with firms increasingly eager to implement this product into their insurance portfolios. As reported by P&S Market Research Global, the global Cyber Insurance market could reach £14bn throughout 2023 with a compound annual growth rate of over 20%.Below I have noted 6 trends we will see in the Cyber Insurance industry in 2023. How will this impact your Cyber Insurance strategy in the new year?

Innovative Underwriting

Throughout 2022, we experienced innovative underwriting techniques used to scrutinise the plethora of inbound risks, with underwriters utilising scanning technologies to identify cybersecurity vulnerabilities within an organisation. This contrast with traditional methods and allows the underwriter to understand the risk in greater detail.In 2023, insurers will move away from proposal form-based presentations and transition into more intrusive underwriting, utilising new technologies and Artificial Intelligence to accurately determine risk value. This will be especially common for many start-up companies looking to disrupt the insurance market.

New Entrants

2022 a lot of new entrants into the Cyber Insurance market with MGAs establishing themselves among the traditional insurers. From a speciality wholesale brokers standpoint, this is the most competition we have seen in the market. This level of competition allows for a variety of options for the insured upon implementing cyber or when looking to move at renewal. This year, I anticipate this trend to continue with plenty of new entrants coming to market along with existing insurers widening their appetite with larger line sizes and entering the primary insurance space.

Rate Stabilisation

Increased competition breeds lower premiums. In 2023 I predict that rates will start to even out, and the industry will not revert to previous trends by increasing premiums. With more competition, improved loss ratios, in-depth underwriting, and improved risk management amongst applicants, I can only see the large increases of the past begin to stabilise.

Baseline Security Requirements Strengthened

With the increasing sophistication of ransomware attacks and despite improvements in cyber hygiene and risk management over the past decade, insurers have become more demanding in their minimum security requirements to obtain coverage. No longer are firewalls and antivirus enough to obtain coverage. In 2023, we will see the continuation in demand for best-in-class cyber security controls including Multi-Factor Authentication, use of VPNs in remote access and Endpoint Detection & Response along with mandatory Privileged Access Management and ongoing vulnerability scanning and detection.

Ransomware Resurgence

Covering 36% of cyber claims, Funds Transfer Fraud overtook Ransomware as the primary source of Cyber Insurance claims in 2022 - reported by Corvus’ Risk Insights Index. However, with significant threats such as Ryuk, BitLocker, Royal, and WastedLocker, alongside the emergence of 'Ransomware-as-a-Service' (RaaS), attacks have become more sophisticated in evading cybersecurity controls. For this reason, I expect Ransomware to be in prime position for the top spot for cyber claims in 2023.

Increased Cyber Regulation

Throughout 2022, we have seen increased client contracts requiring certain limits of Cyber Insurance. Market forces demand risk management and insurance protection from their suppliers, vendors, and clients. In 2023, I predict less reliance on a laissez-faire, free-market approach, with regulators across many sectors looking to impose a minimum level of cyber insurance and risk management across their members.In October 2021, the SRA amended their minimum terms and conditions for Solicitor’s Professional Indemnity cover that requires insurers to make it visible that cyber exposures are not covered by Professional Indemnity policies! This is not imposing cyber insurance on their members. It is making it clear that there is a real exposure that needs to actioning. In 2023, I anticipate this is replicated across other regulatory bodies and there should be a serious discussion on whether cyber protection should be mandatory.

Summary

As with all articles on trends and predictions, this is not an exhaustive list - there will be plenty of variables and driving factors that will affect the Cyber Insurance industry in 2023. However, one theme that has remained critical is the need for Cyber Insurance in a firm's insurance program.Should you require assistance in placing a cyber risk in the London or Lloyd’s market, feel free to get in touch!Written by George GrimshawCyber Insurance Specialist - UK & International

Over the past decade, Cyber Insurance has slowly moved to the forefront of an organisations robust risk management strategy, with firms increasingly eager to implement this product into their insurance portfolios. As reported by P&S Market Research Global, the global Cyber Insurance market could reach £14bn throughout 2023 with a compound annual growth rate of over 20%.Below I have noted 6 trends we will see in the Cyber Insurance industry in 2023. How will this impact your Cyber Insurance strategy in the new year?

Innovative Underwriting

Throughout 2022, we experienced innovative underwriting techniques used to scrutinise the plethora of inbound risks, with underwriters utilising scanning technologies to identify cybersecurity vulnerabilities within an organisation. This contrast with traditional methods and allows the underwriter to understand the risk in greater detail.In 2023, insurers will move away from proposal form-based presentations and transition into more intrusive underwriting, utilising new technologies and Artificial Intelligence to accurately determine risk value. This will be especially common for many start-up companies looking to disrupt the insurance market.

New Entrants

2022 a lot of new entrants into the Cyber Insurance market with MGAs establishing themselves among the traditional insurers. From a speciality wholesale brokers standpoint, this is the most competition we have seen in the market. This level of competition allows for a variety of options for the insured upon implementing cyber or when looking to move at renewal. This year, I anticipate this trend to continue with plenty of new entrants coming to market along with existing insurers widening their appetite with larger line sizes and entering the primary insurance space.

Rate Stabilisation

Increased competition breeds lower premiums. In 2023 I predict that rates will start to even out, and the industry will not revert to previous trends by increasing premiums. With more competition, improved loss ratios, in-depth underwriting, and improved risk management amongst applicants, I can only see the large increases of the past begin to stabilise.

Baseline Security Requirements Strengthened

With the increasing sophistication of ransomware attacks and despite improvements in cyber hygiene and risk management over the past decade, insurers have become more demanding in their minimum security requirements to obtain coverage. No longer are firewalls and antivirus enough to obtain coverage. In 2023, we will see the continuation in demand for best-in-class cyber security controls including Multi-Factor Authentication, use of VPNs in remote access and Endpoint Detection & Response along with mandatory Privileged Access Management and ongoing vulnerability scanning and detection.

Ransomware Resurgence

Covering 36% of cyber claims, Funds Transfer Fraud overtook Ransomware as the primary source of Cyber Insurance claims in 2022 - reported by Corvus’ Risk Insights Index. However, with significant threats such as Ryuk, BitLocker, Royal, and WastedLocker, alongside the emergence of 'Ransomware-as-a-Service' (RaaS), attacks have become more sophisticated in evading cybersecurity controls. For this reason, I expect Ransomware to be in prime position for the top spot for cyber claims in 2023.

Increased Cyber Regulation

Throughout 2022, we have seen increased client contracts requiring certain limits of Cyber Insurance. Market forces demand risk management and insurance protection from their suppliers, vendors, and clients. In 2023, I predict less reliance on a laissez-faire, free-market approach, with regulators across many sectors looking to impose a minimum level of cyber insurance and risk management across their members.In October 2021, the SRA amended their minimum terms and conditions for Solicitor’s Professional Indemnity cover that requires insurers to make it visible that cyber exposures are not covered by Professional Indemnity policies! This is not imposing cyber insurance on their members. It is making it clear that there is a real exposure that needs to actioning. In 2023, I anticipate this is replicated across other regulatory bodies and there should be a serious discussion on whether cyber protection should be mandatory.

Summary

As with all articles on trends and predictions, this is not an exhaustive list - there will be plenty of variables and driving factors that will affect the Cyber Insurance industry in 2023. However, one theme that has remained critical is the need for Cyber Insurance in a firm's insurance program.Should you require assistance in placing a cyber risk in the London or Lloyd’s market, feel free to get in touch!Written by George GrimshawCyber Insurance Specialist - UK & International

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE



+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

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Cookies

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE



+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

Privacy Policy

Cookies

Global Headquarters

Servca Group

Dukes House

32-38 Dukes Place

5th Floor

London, EC3A 7LP

United Kingdom


+44 (0) 207 2250000

info@servca.com


Broker at Lloyd’s SLM1389

European Office

Servca Europe

Dragonara Business Centre

Dragonara Road

5th Floor

St Julian’s, STJ 3141

Republic of Malta


+356 (20) 341690

eu@servca.com


Broker at Lloyd’s (Brussels) SLM1883

Canadian Office

Servca Canada Insurance Group Inc
40 King Street West
Suite 2100
Toronto
M5H 3C2
Canada


+1 (647) 846 5555

canada@servca.com


Non-regulated servicing company

Northern Ireland

Servca Northern Ireland
River House Belfast

48-60 High Street

Belfast

BT1 2BE


+44 (0) 2895582000

ni@servca.com


Broker at Lloyd’s SLM1389

© 2024 Servca


Servca Group Ltd is a private limited company registered in England and Wales; Registered Number: 7727494; Registered Office: Dukes House, 32-38 Dukes Place, 5th Floor, London, EC3A 7LP, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Servca European Insurance Brokers Ltd (a private limited company incorporated in Malta and enrolled to act as an insurance broker); Tower Business Centre, Level 3, Tower Street, Swatar, BKR, 4013, Republic of Malta. UK branch office is registered in England and Wales, authorised and regulated by the Financial Conduct Authority. Servca Canada Insurance Group Inc, a private limited company incorporated at 40 King Street West, Suite 2100, Toronto, M5H 3C2, Canada. Servca group of companies are owned and operated by Servca Group Holdings Ltd, a private limited company registered in England & Wales.

Privacy Policy

Cookies