The Current Market Climate
While the Cyber Insurance market is evolving at a faster pace than expected, there is very little uptake amongst corporates to adopt necessary cyber insurance in Australia as compared to the US. The EU sits between Australia and the US, although they are slowly catching up to the market trends with their new mandatory breach notification laws.
Although uptake in Australia is smaller, the market is looking at an upward trajectory in the coming years. This trend is expected to continue with the introduction of mandatory data breach notification laws in Australia and the EU coming into effect in 2018.
Quality for policy coverage has significantly increased among providers, where insurers are changing focus from a pure reimbursement policy to providing an immediate triage solution.
Aon’s Cyber Insurance Market Update gives an overview of key market insights that the industry needs to be across such as:
- The market is still in its infancy, and penetration rates for standalone cover remain low in Australia
- Australia’s mandatory data breach notification laws take effect 22 February 2018; those in the EU commence three months later, potentially further impacting some Australian businesses
- At the minimum, organisations should be developing data breach response plans
- The Enterprise Internet of Things, and the increasing use of the cloud for data, further increase the need for boards to focus on cyber risk exposures (Aon’s Report)
Insurers and underwriters that are looking to enter the cyber market need to be aware of the rapid changes that are occurring in the industry and focus on making policy changes to stay ahead of their competition.
The local market is now able to deliver upwards of $150M in capacity with almost all insurers now taking part. Recent market entrants include XLCatlin, HDI, Swiss Re and QBE. Rates are at a constant competitive as there are new entrants that have emerged in the market.
Insureds are focusing on improved risk management around cyber exposures, such improvements may not necessarily correlate with a reduction in premiums or improved cover. This is in part due to insurers already heavily discounting premiums in order to secure more customers, but coverage is far superior to what it was a year ago.
While the quality of coverage has increased, insurers still write their policy in a traditional format. The policy will require enhancements to certain terms and conditions to provide clarity of coverage and peace of mind for the insured.
Learn how you can stand out from your competition in the growing Australian cyber insurance market
The Cyber Insurance One Day Intensive Conference on 4th December in Sydney has been developed in response to your feedback to create an event which takes a deep dive into the challenges and opportunities which exist to take cyber products to market.
Stepping into the cyber insurance market can be a challenging feat as the market is still growing. Learn how to stay agile from cyber insurance experts including:
Graeme Newman, Chief Innovation Officer, CFC UNDERWRITING UK
Michael Parrant, Cyber Insurance Practice Leader, AON
Attend the conference to learn:
- Products in the market & where the gaps are?
- Changes in regulation & cyber threats that impact coverage
- How to quantify risk & loss in the absence of historical data to effectively price product
- How to build capacity for incident response
- Claims scenarios – how are policies responding?