At-Bay reports the policy pricing cycle turns much faster for cyber coverage than many other kinds of risk.
“Based on our data and exemplified in the chart above, there is a consistent cycle between ransomware frequency and policy pricing. Two to three quarters after a peak in ransomware frequency, we see a responding increase in pricing.”
The insurtech company says the increasing rate of ransomware attacks so far this year portends the return of harder markets.
“We see clear pressure from heightened ransomware activity, but that is not translating into increased rates creating higher loss ratio pressure. The market should be aware of this and adjust its pricing accordingly or source additional capital as necessary, otherwise the industry might see itself in another hardening cycle with prices rising to recoup (significant) past losses. The current low pricing is unsustainable based on prior trends and the growing loss ratio.”
Read the analysis here.