If you purchase (or are thinking about purchasing) cybersecurity insurance to help protect your business against the fall out of a ransomware or cyber attack – whether you need to protect confidential customer data or get your business operations back up and running after a cyber attack – this insurance market update is for you.
Check out our video with Marsh Pacific’s cybersecurity expert Kelly Butler, who shares key highlights on the Australian cyber insurance market, including:
- Premium impacts
- Coverage and underwriting trends
- Some challenging areas
- Tips on how you can achieve the best renewal results
This insurance market update is part of a bigger report that we publish once a year, which covers a wide range of insurance types including liability, property and much more – if you’re interested in reading the full Australian Mid-Year Insurance Market Update for 2023, you can download it after the video and transcript.
The market conditions and premiums for cybersecurity insurance have begun to stabilise. There’s a general increased awareness around cybersecurity risks, which means that more businesses have been purchasing and/or increasing their levels of cybersecurity cover. But the increase in cyber breaches across Australia also means insurers are cautious to provide insurance to high-risk businesses, especially those with inadequate controls or standards.
Let’s take a closer look.
Scroll down to download the full report.
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Transcript
Technology and data create both risk and opportunities in a dynamic environment and maturing cyber market. The Australian cyber insurance market began to stabilise in the first half of 2023 as profitability improved. Rates are decreasing; though the underwriting process continues to go deep on cybersecurity controls. Coverage scrutiny remains especially around privacy and war.
Premium trends: Sustainable loss ratios, selective underwriting, and new entrants have led to a more competitive cyber market. Premiums increased by 10-15% on average in the first half of 2023, which were notably lower than last year. Positively, average increases continue to trend downwards. Premium increases were largely driven by risk-specific factors.
Claims trends: Cyber claims frequency has steadily increased over the last 10 years. Based on Marsh data, this trend is expected to continue and accelerate. Industries impacted the most include legal and professional services, healthcare, government, and financial services. In Australia, we’ve also seen an increase in regulatory scrutiny and government intervention.
Insured purchasing patterns: Following a number of high profile data breaches in Australia and increasing awareness of cyber risk exposures, we’ve seen insureds electing to purchase higher limits. Overall, less restrictive coverage and increased program limits were achieved in 2023, with the number of cyber insurance policies placed continuing to rise. Stringent underwriting remains, with an increasing focus on how cyber fits into the ESG space.
Improving renewal outcomes: With improving market conditions, there’s greater scope for clients to obtain better coverage and tailored solutions. Demonstrating strong maturity and cyber resilience, focusing on critical controls, and starting the renewal strategy early are key to ensuring the best possible renewal outcome.
Download report: For more insights on the Australian cyber market, or details on other insurance classes, download our full report today.
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Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.
Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.
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