Light Upon CYber insurance / © Amrae - 23 - 3. PROSPECTS FOR 2023 AND 2024 Towards a new market balance Large and Mid-cap companies appear to have found a market equilibrium: premium rates are expected to stabilize and available capacity to increase in 2023 and 2024. On the other hand, medium-sized firms as well as small and micro firms are expected to undergo the market adjustment that larger firms have experienced. It is already underway for medium-sized firms and is expected to occur in 2024 for smaller firms. Increased pooling to reduce volatility The balance found in the large company and Mid-cap market is largely linked to the decline in claims. Is it cyclical or structural? Have the prevention and protection measures taken by companies really borne fruit? Will the war in Ukraine cause the number of attacks to explode? It is still too early to answer... But one certainty remains: cyber risk remains volatile. In 2017, the NotPetya malware attacks cost Merck Laboratories $620M, FedEx $300M, Maersk $300M, and SaintGobain $250M respectively. The cumulative cost of these four losses represents nearly five times the overall volume of premiums collected in 2022 by insurers in the French market (€315.7M). “This amount is still too low to absorb very large claims, comments Philippe Cotelle. This volatility is perceived by insurers as a risk factor. This is why Lloyds’ of London announced in August 2022 that it would no longer cover losses resulting from statesponsored cyber attacks. “For the moment, this position is not being followed by French reinsurers and insurers, observes Philippe Cotelle. But it shows a certain nervousness about cyber risk, the future of which remains difficult to decipher.” A massive increase in the number of insured companies, and therefore in the volume of premiums collected, would allow better absorption of extreme losses. From this point of view, the results for the year 2022 - very positive for insurers - are a good signal: “Insurers are regaining their appetite for cyber risk”, Philippe Cotelle is pleased to say.
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