Beazley Leads Cyber Insurance Market Amid Sector Challenges
The London-based insurer Beazley has claimed the top spot in the global cyber insurance market, which shows them as having a 6.68% market share and an estimated £827m (US$1.06bn) in gross written premiums(GWP) for 2023.
Revealed by a report from insurance insights company Insuramore, the study showed Beazley narrowly edged out Swiss insurer Chubb, which recorded £811m (US$1.04bn) in GWP.
Yet such a title may have recently proved to be a crown of thorns, as the cyber industry is rocked by record levels of attacks and unprecedented outages.
- In the 2023 London’s Leading Underwriter report, Beazley received the overall bench strength award for the third year in a row.
- In 2023, Beazley was awarded the Service Quality Marque for its outstanding Claims performance for the seventh year running, with a good performance in all business lines and leading the market in War & Geopolitical Risks.
- Among placing/ producing brokers, Beazley ranks first for future consideration to lead or co-lead good quality new business.
- In Gracechurch’s research, Beazley is rated as providing one of the best on-site experiences for the broking community.
- Beazley leads the market as an employer with the highest ranking in Gracechurch’s Employer Brand Index, conducted among underwriters, claims professionals and other insurance professionals.
Interest in cyber insurance
The global cyber insurance market, valued US$15.7bn in 2023, is experiencing rapid growth.
A Sophos survey showed 76% of companies have been taking great efforts to improve their cybersecurity posture in order to apply for cyber insurance.
This, however, comes from a changing threat landscape. A surge in attacks, more complex attack vectors and digital transformation efforts expanding the attack surface all mean that for cyber insurers, now is a risky time.
It’s for reasons like this that acclaimed investor, Warren Buffett said earlier this year that Berkshire Hathaway has advised insurance agents to only sell cyber policies if they absolutely had to do so to satisfy a client, and to expect losses.
Ajit Jain of Berkshire Hathaway cited the reasoning for such apprehension as the ability for costs to quickly aggregate.
“That aggregation potential can be huge, and not being able to have a worst-case gap on it is what scares us,” he said.
This sentiment has been illustrated with the recent major IT outage caused following a CrowdStrike update and effected thousands of businesses and their operations around the world.
Market dynamics
Insuramore’s study highlighted the narrow gap between Beazley being first and Chubb second, but it also showed how the GWP is not largely held by the market leaders.
The top five cyber insurers accounted for just under 30% of the global market, with all other insurance groups making up the remaining 70.65% of the line’s GWP.
When extending this to the top 20 cyber insurers, their combined GWP accounted for 64.9% of premiums. The top 50, on the other hand, control a full 89.6%, which was a fall from 92.3% in 2022.
“Looking ahead, the trend towards fragmentation implied by the comparison of the global market share of the top 20 and top 50 groups in 2022 and 2023 is likely to continue in 2024 as cyber business expands more rapidly outside of the US, where premium rates have tended to decline in recent months,” Insuramore said following the report.
Interestingly, this market diversity coincides with a UK insurance broker Howden reporting a stabilisation in cyber insurance costs. The expanding cyber insurance market is not limited to large corporations. Small and medium-sized enterprises (SMEs) are increasingly seeking coverage, contributing to the market's growth and diversification.
Yet, Insuramore cautions against over analysing the dynamic to determine future moves.
“Modelling a reliable future trajectory for the value of cyber insurance worldwide remains problematic due to the multiple factors impacting the sector,” Insuramore said. “These include, for example, the global outage incident which occurred on 19 July 2024, the implications of which will become clear in the coming months.”
Looking ahead, the cyber insurance sector is poised for continued growth and transformation. Yet, the details of the shape of the industry remain unclear as the insurance market dynamics remain fragmented amid the difficulty of insuring against a risk that is hard to see where it starts and stops.
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