Cyber-insurance prices plummet as market competition grows

A steady decline in premium rates over the past year has made it more affordable than ever for organizations of all sizes to acquire cyber-insurance coverage.

Much of the decline is the result of a more competitive marketplace in which many more insurance companies than even two years ago have begun offering coverage for cybersecurity incidents such as ransomware attacks and data breaches. Partly, the lower rates are also tied to better cyber hygiene overall among a growing number of insured organizations, according to a new report from London-based Howden Insurance.

Notable Cyber-Insurance Premium Decrease

Howden tracked a 15% reduction in average cyber-insurance premium rates in 2023 compared with the prior year. The decline followed a two-year period between December 2020 and December 2022 in which rates surged dramatically as the result of a big increase in ransomware-related claims.

“Favorable dynamics have persisted into 2024, with the cost of cyber insurance continuing to fall despite ongoing attacks, heightened geopolitical instability, and the proliferation of GenAI,” said Sarah Neild, head of cyber retail, UK, at Howden, in a statement. “At no other point has the market experienced the current mix of conditions: a heightened threat landscape combined with a stable insurance market underpinned by robust risk controls.”

Howden says the foundations are in place for a more mature global cyber-insurance market with most future growth (predicted at 54%) coming from outside the US between now and 2030.

Howden’s findings are similar to those by US-based Aon, which earlier this year reported a 17% decline in premium rates in 2023 compared with 2022. Like Howden, Aon also expects pricing for insurance to remain stable through at least the end of the year because of “ample capacity and a competitive market environment.”

Aon’s analysis showed that a surge in ransomware and other cyberattacks — including notable incidents like the one involving Progress Software’s MOVEit file transfer software and the Cl0p ransomware group’s targeting of the flaw — has heightened interest in cyber insurance among organizations. Also contributing to the growing interest are heightened regulatory reporting requirements around cybersecurity incidents for many organizations.

“Despite a growing number of cyber incidents and heightened privacy regulation, the U.S. market showcased expansion of a buyer-friendly cyber market,” the Aon report noted. “In addition, business efforts to strengthen security have created more sustainable pricing levels.”

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