In this interview with Cyber Risk Insurer, Erica Davis, Global Co-Head of Cyber, addressed how the market has grown, attracting greater capacity to the cyber segment compared to recent years.
Erica noted how the maturation of the cyber segment in the past several years has made both insurers and reinsurers more comfortable with the risk, despite frequency and severity of claims.
“You had improved risk postures, better risk controls in place, higher retentions, lower limits being deployed,” she explained. “So, all of that has meant that even with heightened activity, the portfolios are performing profitably. There’s strong performance. We see that reflected in the amount of capacity that was still available in the market at 1/1 (renewals), and we think that will continue to be the case, at least through mid-year.”
Erica went on to describe how data generated by loss activity and overall market growth contributes to the confidence of her and her team regarding market assessment.
“I think with better data being available, there is much greater confidence in how we can model attritional performance.”
This article also mentions Guy Carpenter’s March 2024 report, Refocusing the Lens: An Updated Look at Cyber Model Divergence, which presents research based on the latest model versions while expanding the scope to include tail losses.
Please note: Erica’s interview is on pages 48-51 of Cyber Risk Insurer’s e-magazine, and can also be read by clicking the link below.