CYBER INSURANCE MARKET – SCAGLIARINI APPROACH TO 2020/2021 TRENDS IN ITALY/YPA
During 2020, also due to the Covid-19 pandemic, cyber risk became the first concern for every kind of business, regardless of industry sector or company size. In particular, ransomware attacks grew worldwide of 105% compared to 2018, boosting the demand for cyber insurance and making also the EU and Italian cyber insurance marketplaces much harder:
- capacity has shrunk drastically, from € 20 Mio to € 10 Mio of purchasable limit for almost all carriers, applying sub-limits for core coverage extensions such as cyber extortion, incident response costs etc.;
- cyber insurance rates have increased on average from 1% till 2,5%/3% of policy limit;
- minimum deductibles have generally been set at € 100 k;
- underwriters have started to assess the risks prior to bind the coverage, using software and tools to scan their external perimeter / web exposure.
As a consequence, sharpening our technical knowledge on Cyber risk has become crucial as insurance brokers and consultants of our clients and prospects. What our company has done so far?
- built up an internal cyber specialty team, within both our sales and claims departments. This choice has given us the possibility to discuss in technical details both with our clients’ and prospects’ IT/Privacy departments and with insurers;
- started partnerships with several well-known cyber security companies - e.g. Vodafone Security Solutions – to help clients and prospect in assessing, mitigating and containing their risk providing penetration tests, vulnerability assessment, monitoring tools operating 24/7;
- settled Cyber-dedicated webinars and newsletters, with specific topics – e.g.: working from home, cyber claims’ management and incident response process, etc.;
- reached agreements with the cyber insurance leading carriers, to smooth the whole cyber claims’ management process.
The above stated, we believe 2021 is going to be a challenging year in terms of Cyber risks placement and insurance market development. We expect an increasing interest from clients but also difficulties in terms of insurers’ appetites and exposure and premium increase. On our side, we trust being specialized on Cyber will give us both possibility to support our clients in managing the risk properly and new opportunities in terms of prospecting and cross-selling.