Erica Davis, Global Co-Head of Cyber for Guy Carpenter, shares her insights on cyber reinsurance market conditions in this Business Insurance article. The cyber liability reinsurance market remains restricted, but more capacity is expected to enter the sector, from both traditional reinsurers and third-party capital sources.
Cybersecurity risk management measures encouraged by insurers, such as multifactor authentication, are leading to improved results for cedents, making the risks more attractive to reinsurers. According to Moody’s Investor Service, the sector’s loss ratio improved to 62% in 2021, from 65% in 2020.
“We are doing a lot of work with reinsurers,” Erica said, to help them grow their cyber business, as well as sourcing new capacity.
She goes on to explain how Guy Carpenter is working to educate the new entrants on the risk, the improving state of the market, and why headline events alone are not enough to inform appetites to cyber risk.
“Guy Carpenter is also working with new capital sources because we feel this risk is expanding so dramatically that traditional capacity won’t be sufficient” to keep pace with the market’s growth, she said.
Our global Guy Carpenter Cyber Center of Excellence delivers unique insights on the cyber threat landscape and market trends, working across the Marsh McLennan enterprise—Marsh, Oliver Wyman and Mercer–to provide superior placement services, benchmarking analysis, market intelligence and modeling.