Japan’s cyber insurance market continues to grow amid flat reinsurance demand: Gallagher Re

The Japanese cyber insurance market continues to grow, albeit at a slower pace compared to previous years, driven by the increasing number of policyholders, according to reinsurance broker Gallagher Re’s recent market analysis.

Gallagher Re’s April 1 renewal report shows that overall, the global reinsurance market showed increased capacity and greater flexibility for buyers, reflecting the sector’s strength following strong financial performances.

1.4 is the main reinsurance renewal period for Japan, and Gallagher Re’s report explores outcomes across all lines of business, including cyber.

The reinsurance broker observed that within the Japanese cyber insurance market, demand has notably increased within the small and medium-sized enterprise (SME) segment, following the frequent cyber incidents and attacks across several industries.

Despite this increased demand, original insurance rates have generally remained stable, with only modest adjustments seen in certain sectors.

Additionally, the treaty results remained profitable despite the emergence of several mid-sized losses across the market over the past 12 months.

Buyers benefited from a relatively soft reinsurance market characterised by ample capacity. According to the report, an increasing number of reinsurers are showing an appetite for International Cyber. Some buyers were also able to increase their ceding commission.

When compared with the prior year, pro rata cyber reinsurance rates in Japan trended flat to up 2%, while risk loss-free rates were down 5% to flat, according to Gallagher Re.

While overall demand for cyber reinsurance cover remained largely unchanged, strong underlying business performance could lead to scrutiny of quota share cession percentages in the coming months, warned the broker.

Moreover, analysts observed that competition between a broader range of quoting reinsurers continued to put pressure on excess of loss pricing.

Reinsurers also continued to examine cyber war exposures, albeit to a lesser extent compared to last year, Gallagher Re noted, largely because the vast majority of original policies now carry a market-standard war exclusion.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.