Driven by a dynamic threat environment and growing understanding of how cyber insurance mitigates cyber risk, the world of corporate cyber insurance underwent significant change in 2023—and the market shows no sign of slowing in 2024.
To uncover top trends shaping the market, we sat down with John Sinclair, Senior Underwriter, Corporate Cyber, CFC. Read on for his top 2024 predictions for the corporate cyber market.
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A more stable pricing environment
The latter half of 2023 saw downward pressure on pricing after several years of price increases caused by heightened ransomware activity. While cheaper premiums is a bonus for businesses, there’s also a strong desire for pricing stability—from insurers, brokers and end-users.
In 2024, we expect the claims environment to be sufficiently tough to offset sustained downward pressure on pricing, despite the level of capacity available in the market. This will help the market achieve a more stable equilibrium, which will benefit all parties in the long run.
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High market growth will demand sufficient capital supply
Few signs suggest the cyber market’s current growth will halt, but reinsurers and capital markets need greater comfort around systemic risk modelling if they’re to supply the capacity to fuel continued growth.
As it stands, current capacity levels are enough for the majority of large corporates to source the limits they desire. As the cyber insurance market grows, we’ll see specialist markets continue to deploy large lines and meet this growing demand. At CFC, we’ve offered a traditional line of £25 million in the large corporate space for some years now, and will continue to provide the world’s biggest businesses with the cyber protection they need.
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Ransomware and data privacy claims still high on the agenda
With cybercriminals always chasing greater profits, ransomware and cyber extortion will continue to be top cyber threats in the large corporate space—and a major source of cyber claims.
In 2024, we’ll also see increased regulatory scrutiny on data privacy, with governments across the globe introducing new privacy laws for businesses to abide by. In the US, the landscape is even more complex, with individual states creating rigorous privacy regimes. We’re likely to see an increase in third-party privacy liability claims, many of which will arise from the alleged misuse of biometric data and website tracking technology.
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Greater risk management services that come with a cyber policy
As cyber threats continue to evolve, innovation in the services that come with a good cyber policy will increase to provide the protection businesses require.
In 2024, expect insurers to focus on proactive risk management, key in helping to stop cyber incidents from happening and minimize impact when they do occur. At CFC, our threat intelligence alerts are already helping large corporate clients avoid cyber incidents altogether. It’s innovations like these that make cyber insurance one of the best investments any business can make.
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Continued innovation in managing systemic risk
In 2023, the focus on systemic risk grew stronger, with the market introducing the war exclusion, the market’s first cyber catastrophe bond and the Cyber Monitoring Center, which is designed to define and categorize systemic events.
Across 2024, systemic risk will remain a major concern for all cyber insurers. We’ll likely see further innovation in how it’s managed, as the market looks to more easily delineate between attritional claims and systemic risk events.
Getting cover for emerging exposures
However the corporate cyber market changes, what’s certain is that risks will continue to emerge and evolve.
CFC has over two decades’ experience in cyber, making us one of the most established providers in market. By looking ahead at what's next, we're always ready to help businesses shift and pivot to emerging risks—no matter what the future holds.
Learn more about our market-leading cyber cover for large enterprises by getting in touch at cybermarketing@cfc.com.
