Large rate increases for cyber insurance in Q3
Cyber insurance stood out in Q3 as the only line of insurance with consistent, large rate increases, averaging more then 15 percent in the US, according to Marsh’s latest global insurance market quarterly briefing.
The average cyber insurance limits purchased exceeded the $20 million level for the first time and limits purchased were up more then 10 percent, on average, compared to the same period last year.
The report also identified that the UK and the Asia Pacific region posted the largest composite rate decreases, followed by Europe, Latin America and the US, respectively.
Property insurance had the largest rate declines, with decreases averaging more than 5 percent. Rate decreases for property insurance occurred across all regions in Q3, led by the Asia Pacific, followed by Europe and the US, with Latin American and the UK showing the smallest decreases regionally.
According to the report casualty insurance rates, on average, had declines consistently from 2 percent to 4 percent across all major regions, led by the Asia Pacific and the UK.
Financial and professional lines of business presented mixed rate results during Q3. The report revealed that the global composite index for financial products decreased 5 percent, however, the US and Latin American both posted small increases.
Marsh believes this is largely a consequence of cyber insurance, which increased the US in Q3. In addition, financial and professional rate increases declines steadily in other regions, particularly in the UK.
The report also showed that the Marsh Global Insurance Index stood at 0.944 in Q1 of 2015, down from 0.956 in the previous quarter.
Paul Denny of Marsh commented: “Cyber is a unique exposure—it continues to evolve and it is clearly here to stay. Organisations that understand the nature of potential threats and their exposure to cyber attacks will be best suited to develop a comprehensive risk management strategy to counter them.”
Author: Becky Butcher