This article was first published by Guy Carpenter here.
In this video interview with A.M. Best TV concurrent with the 2022 Monte Carlo Rendez-Vous event, Guy Carpenter’s Erica Davis and Anthony Cordonnier, Global Co-Heads of Cyber, address the challenges and opportunities of the cyber market.
“I think there is still a challenge for organizations to really understand cyber risk—that’s the full scope of the exposure and also how best to protect themselves,” Erica said. “As an industry, we’ve struggled to define the product and really make it into a tangible purchase for them.”
Anthony explained how the market has transitioned as risk potential has shifted.
“If you think about the cyber product and how the losses impacted the market in recent years, this used to be a privacy-focused product impacting larger organizations,” he said. “We’re now seeing trends like ransomware that has really brought it to life.”
Capacity has been an enduring question in the cyber market. Only about half of organizations around the globe currently have cyber coverage. How much capacity is enough? Acknowledging tight availability, Erica also expressed optimism in the sector’s continuing ability to serve clients.
“On the reinsurance side, capacity is very constrained. We also have been able to support the growth strategies of our clients, so it is available at this time. But I think there is a lot to be done over the next couple of years so we can continue to support the market,” she said. “There has been a number of new reinsurers who are interested in supporting the market who previously hadn’t been players on the reinsurance side, so that’s been an encouraging sign for us.”