Cyber insurance is growing fast as insurers face big risks and changing threats. A recent report from Risk Placement Services (RPS) shows that new players like insurtech companies and managing general agents (MGAs) are adding more capacity to the market. At the same time, some established insurers are easing their rules to keep their customers.
Steve Robinson, RPS’s National Cyber Practice Leader, said that coverage limits have increased a lot. What used to be $1 million or $2 million limits are now moving up to $5 million. Some insurers are offering policies with limits as high as $10 million or even $15 million. This shows how much more capacity there is now. Carriers are also trying new approaches to offer better products and keep their premiums competitive.
Jack Rosen, an assistant vice president at RPS, pointed out that the market is still unstable and probably will be until some mergers reduce the number of companies offering cyber insurance. He also mentioned that carriers differ widely in how they handle claims and price risk, which adds to the uncertainty.
One surprising trend is that many policies have very low premiums, sometimes just a few thousand dollars, but claims can be quite high—$100,000 or more. Many claims aren’t from traditional data breaches but from scams like social engineering fraud and invoice manipulation, where companies accidentally send money to criminals pretending to be someone they trust.
Insurers are responding by offering services that help prevent attacks. This includes training, risk assessments, and access to security tools. They are also updating policy language to address new risks, like threats related to artificial intelligence or vendor weaknesses. This is helping the market become more stable with clearer and more consistent policies.
Robinson highlighted that insurance companies have helped businesses improve their cyber defenses. Now, to get coverage, organizations usually have to follow certain rules about data security and hygiene. This has helped many companies get better prepared against cyber attacks.
However, Rosen pointed out a challenge for agents who don’t specialize in cyber insurance. Since most carriers now offer similar coverage, it’s harder to stand out. Many insurers compete mainly by lowering prices, making it a race to the bottom.
In short, cyber insurance is evolving quickly. There’s more capacity and higher limits, but also risks and challenges. Insurers and businesses alike are adapting to stay ahead in this changing landscape.