Swiss Re Reports Cyber Insurance Rate decline, Cautions on Sustainable Growth
A new report from global insurance firm Swiss Re, released Wednesday, indicates a third consecutive year of declining rates in the cyber insurance market. This reduction is driven by an oversupply of coverage relative to current demand, forcing insurers to concede on premiums, cybersecurity controls, and coverage limits.
The report highlights growing industry concerns regarding potential systemic loss events and liability related to data privacy, raising questions about the sustainability of continued premium cuts. swiss Re projects cyber insurance premiums will reach $15.6 billion in 2025, but has revised growth estimates downward from 6% to 5% due to evolving market conditions.
currently,growth in cyber insurance is largely concentrated among large corporations. Penetration remains limited within the small buisness sector, with coverage reaching only 10-20% of small and medium enterprises (SMEs).
Fabian Willi, head of cyber key accounts at Swiss Re, emphasized the need for market expansion into segments like the SME space to ensure future sustainable growth. he noted the highly competitive landscape empowers organizations to negotiate favorable terms, making insurers hesitant to implement stricter underwriting standards. Though, Willi stressed the importance of maintaining minimum cybersecurity hygiene requirements as part of the underwriting process.
“Given this very dynamic cyber market habitat, it is difficult to predict future rate trends,” Willi told Cybersecurity Dive via email. “However, it has become apparent that for future sustainable growth, the market needs to expand or enter into new customer segments, such as the SME [small and medium enterprise] space where cyber insurance penetration is at a low 10-20%.”
Sridhar Manyem, senior director at AM Best, confirmed Swiss Re’s findings, stating his agency has observed a continued softening of prices and loss ratios in the 40% range. He added that while the industry hasn’t faced a systemic cyberattack,underwriting remains cautious,supported by reinsurance and a focus on policy terms and conditions.
