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Rate momentum in the cyber insurance marketplace has been driven by a trifecta of issues, according to Eric Seyfried (pictured above), Head of Cyber US Open Market at AXIS Insurance. First and foremost, the frequency and severity of claims continues to rise, especially in the ransomware space. Cyber insurers have started to look at how those claim trends impact their books, and they’re adjusting their pricing accordingly. At the same time, the US is working through a near-zero interest rate environment and the cost of capital is increasing, forcing insurers to be more calculated in their risk selection and pricing.
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“Such changes in the macro environment lead to a hardening market with (re)insurers exiting unprofitable classes leading to reductions in available capacity and increased costs of reinsurance and capital provisions,” said Jo Chadha (pictured below), Deputy Head and Chief Underwriting Officer of Cyber & Technology at AXIS. “The market is not only reliant on reinsurers and capital markets, but the regulatory environment also has significant impact on how insurance products are designed and sold. While the market was already hardening in certain sectors in the last two years, the pandemic has not …
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