The changing cyber market

January 21 2022 By David Cannon

Following on from our previous blog post about cyber risks and ransomware, we wanted to take a look at the ever-changing cyber insurance market which, due to the effects of ransomware, is evolving at pace.

As the cost of dealing with ransomware increases in terms of frequency as well as severity of claims, some insurers are opting to reduce their exposure, capacity and appetite for risks. This has created what insurers call a ‘hard market’.

Will this result in rate increases? 

It is possible, with insurers looking to tackle the increasing costs of claims.  As with any ‘hard market’, rate increases are something that we will likely continue to see in the short-term.  There is also the likelihood of longer-term restrictions in cover, such as co-insurance clauses or lower limits for ransomware claims. We may also see insurers reducing appetite offering lower limits/sums insured, with a growth in Excess of Loss policies (XOL)* becoming the norm. 

*XOL example: insurer one takes £5m limit, then insurer two takes the second £5m limit in excess of the £5m, giving a total limit of £10m.

Only recently in the news were there reports that the US Treasury are looking at potentially making ransomware payments to cyber criminal’s illegal. While there are many discussions around this, it highlights the urgent need to try and stop the trend of ransomware claims by removing the ‘carrot’ which some within the US Government hope will reduce the frequency of ransomware attacks in turn.

Whether these changes will happen is unknown. UK markets, such as Lloyds of London, are already reacting to high loss ratios in the USA by reducing capacity and are looking to co-insure with other insurers on policies with higher limits.

What this does highlight is that as the cyber risk increases, we may see a tighter market become the norm.

As a business, it’s vital that you assess your cyber threat, and a Cyber insurance policy is still one of the best methods in protecting your business and its reputation.

Conclusively, while the market is reacting to these changes, now is a great time to look at purchasing cyber insurance – ahead of a market-wide response, which could bring potential premium increases.

Want to speak about your cyber risk and find out how a Cyber insurance policy can protect your business? Speak to one of our experts at  or call 0161 830 5429 today.