The cyber insurance market is still trying to find the right balance between affordable prices and staying financially stable, according to Megan North, executive vice president at Amwins Insurance Brokerage. Despite efforts, the industry hasn’t yet figured out how to offer competitive rates while maintaining long-term sustainability.
North explained that cyber insurance is a tricky field because the risks keep changing. Right now, prices are close to the lows seen before the pandemic, but claims and losses have not really gone down. She expects some changes in pricing could happen soon but hopes they won’t be as extreme as those between 2020 and 2021.
Even with lower prices, demand for cyber insurance remains high. Recent major hacking incidents have shown just how damaging a cyberattack can be, not only for the companies targeted but also for their partners and suppliers. This has made many businesses eager for better coverage. Lower costs have also made it possible for companies to buy more insurance or higher limits. North noted this is encouraging both new buyers and those wanting to expand their cyber programs.
More policyholders are now interested in services that insurance companies offer alongside coverage, like vendor discounts, security checks, and breach support. These extras can help improve security and might help reduce losses, which benefits everyone involved.
While overall rates have stayed low, insurers are becoming pickier about who they cover. Some industries, such as healthcare, manufacturing, and financial services, are getting more attention because they have had more claims. Underwriters are tightening their criteria for these sectors.
North sees big opportunities in serving small and midsize businesses (SMEs). Many new small businesses open each year, and many of these are vulnerable to cyber threats. Incident costs for SMEs are rising, making cyber insurance an important protection for them.
For larger companies, North mentioned “blended programs” that mix cyber coverage with other types of insurance like general liability and property. Rather than treating cyber risks separately, more companies are seeing it as part of their overall risk and want insurance that reflects this.
The cyber insurance industry is still reacting to threats as they appear. Attackers only need to succeed once, while defenders must stay perfectly secure all the time, which is a huge challenge. However, because cyber risks are manmade and always shifting, there is a chance to lessen the damage while an attack is happening.
Overall, the market remains in flux, with strong demand and smarter buyers pushing for better products. Insurers are adjusting their strategies, and new opportunities are emerging for businesses of all sizes. As cyber threats evolve, so too will the insurance options designed to protect against them.