Assured Reacts: Mactavish Reports that UK Cyber Insurance Premiums are Increasing

What’s Assured’s take?

Contrary to the survey findings, we’re seeing signs of premiums stabilising and insurers competing to win business. So while there are parts of Bruce Hepburn’s commentary that we agree with (the blockers for insurance adoption, for example), there are larger chunks that we oppose.

Why would an insurer not pay out on a claim? An insurance policy is a legal contract, the terms of which are agreed upon between a client and an insurer, with a broker advising on how the contract should work. If a claim is made and covered under the contract, the insurer legally has to pay out. If a claim is denied, it’s because there is a discrepancy in the cover or contract. At Assured, we make it our business to be utterly candid about precisely what is and isn’t covered in a policy before it has been purchased; that way, clients have accurate expectations.

It’s important to understand that cyber insurance is about so much more than just the payout. It’s also about support. For example, did you know that most insurers offer the first 72 hours of a cyber incident outside of the policy limit, meaning there is no excess to pay and no need to ‘log a formal incident’?

As for the cost of cyber insurance, the fee represents the risk. If cyber weren’t such a considerable risk, it wouldn’t be such a valuable product. Let’s flip the ‘23% of businesses are without cyber cover’ stat; that means 77% of companies are insured against cyber attacks. This is an incredible statistic demonstrating that the cyber insurance model is working.

Hepburn’s use of the word ‘turbulent’ suggests that the cyber insurance market has been unsteady. In fact, it has reacted so as to remain buoyant so it can adequately protect businesses buying cover. Rate increases weren’t the cause of a ‘soft market’ hardening. Instead, they served as an industry correction as insurers adjusted their rates according to necessity.