Speaking at the briefing of S&P Global Ratings at RVS Monte Carlo 2023, Johannes Bender director and lead analyst said that “reinsurance pricing should be increased for cyber.”
During the briefing he addressed how cyber is one of the fastest growing lines of business within the industry, highlighting $12 billion in premiums recorded by 2022.
“It could reach our estimate of $23 billion by 2025,” he said.
“So 20-30% of growth rates can exist there.”
He continued by explaining how the importance of reinsurance is very pronounced within cyber as more than 50% is reinsured in that line of business.
However, the performance of primary cyber reinsurance remains very different.
Bender, continued: “Primary writers have had good years between the last two to three. However, in reinsurance it is different, with the whole combined slightly above 100%.
“So we think reinsurance pricing needs to be increased for cyber.
“But at the same time, our assumption is that the prime rates should not be passed on at the same rate to the policy holders, not to disrupt the market because of better margins on the prime side.
“Within this market is still in its infancy. Market participants in our view are also wary of putting more pressure on policyholders because the market is still very early and policyholders still getting used to it.
Additionally, Bender also addressed how silent cyber looks like it’s well covered and that it remains a factor that’s on everyone’s mind across the industry.
“It has evolved from existing coverages to clear cyber coverages that to some extent are good for handling claims.”