Increased competition and capacity at mid-year cyber renewals: Aon

Mid-year cyber renewals have signalled further improvements for buyers, with plenty of capacity and increased competition leading to positive outcomes for most insurers, according to insurance and reinsurance broker Aon.

After a period of rapid price increases in 2021 and 2022, the cyber insurance market continues to see new capacity, resulting in softer market conditions despite rising ransomware activity and claims.

Rates have continued to drop in 2024, especially in higher excess layers due to new market capacity. Despite this, cyber insurance portfolios are performing well: the average loss ratio for the top 20 US cyber insurers in 2023 was just under 43%, according to the NAIC.

Although competition has increased, underwriting discipline has remained strong. Insureds who have invested in cybersecurity, improved access management controls, and backup strategies have significantly reduced both the frequency and severity of claims.

Cyber risks are becoming more manageable, and insurers’ ability to understand and select these risks is improving. However, cyber insurance penetration remains very low, especially outside the US and among small and medium-sized enterprises (SMEs).

“Following a successful 1/1, and now mid-year renewals, Aon achieved favourable outcomes for clients in a transitioning market. As insurance market conditions continue to show signs of softening, careful preparation, and the ability to differentiate and demonstrate a strong track record of performance, will be key to achieving optimal renewal outcomes,” Aon concludes.

The post Increased competition and capacity at mid-year cyber renewals: Aon appeared first on ReinsuranceNe.ws.