By Jonathan Franke, Tech, Media and Cyber Broker at New Dawn Risk
2021 will see the scaling up of the worldwide rollout of 5G networks, with North America, Europe and East Asia leading the way. 5G’s importance has grown since the onset of the pandemic, with much of the world switching to remote working and requiring faster, more reliable data speeds and network management in order to continue operating efficiently.
As we continue to transition to a progressively cloud-based society, when it comes to data transmission and storage, the majority of the developed world will swing towards 5G, which brings with it a brand new cyber threat landscape that is yet to be understood.
The rollout of 5G will continue to enhance the expansion of the Internet of Things Age in almost all industry sectors and many homes, as more and more smart devices connected to the internet become essential everyday equipment. This poses an explosion of vulnerability avenues for criminals to exploit seemingly secure networks almost undetected.
Both B2B and B2C companies must prepare to invest in more sophisticated and increased levels of monitoring of their networks, controls and technology. They will place more and more reliance on IT experts to ensure adequate protection is in place, in spite of a widening IT skills gap. And they will have to do so at speed – planning for the increased risks associated with 5G should already be well developed. Those who have taken their eye off the ball, perhaps distracted by adjusting their operations to cope with COVID-19, run the risk of increased vulnerability.
The same applies to cyber insurers. They have a responsibility to be 5G-ready too, in terms of making sure that their cyber insurance offerings are up to speed and they are providing their clients with adequate protection. In 2021, we will see cyber insurers and buyers scrambling to be ready for the roll-out of 5G; wordings are likely to change, coverage could be challenged, and we should expect some related upheaval.
By Max Carter, Chief Executive Officer of New Dawn Risk
The combination of a perception that insurers are looking to ‘wriggle out’ of paying covid-related business interruption claims and general insurance premiums rising as a result of hard-market reinsurance rating pressure will further dent consumer confidence in the value of insurance. Back in 2017, a survey by comparison site Claims Rated[1] found that only 37% of younger consumers (aged 16-29) believed that an insurance company would pay out in the event of a claim. The PPI scandal still lingers in the memory of many, and rising general insurance premiums over the past couple of years have continued to compound the issue. In specific sectors, such as the construction industry, struggling with massive liability insurance premium increases and additional exclusions in the wake of Grenfell Tower, confidence in the value of insurance has fallen even lower.
We predict that commercial SME buyers will be more inclined to allow non-mandated insurance to lapse as they struggle with increased financial pressures from the impact of covid, justifying their decisions on the basis that insurers try to avoid claims in any case. Purchases of newer products, such as cyber insurance, will almost certainly fall off as well. It will take an industry-wide coordinated campaign to rebuild consumer trust in the industry.
[1] https://www.insurancetimes.co.uk/only-half-of-british-consumers-trust-insurance-companies-to-pay-claims/1425151.article
By Nicky Stokes, Head of Management Liability and Financial Institutions at New Dawn Risk
In what has been the most unpredictable year ever, the road for D&O and other management liability classes has been particularly bumpy. In summer 2020 many in our industry had hoped that by the end of the year life would have been returning to ‘normal’, with the main concern being the ongoing hard market, driven by years of insufficient rates, under-reserving and inadequate retentions.
But Covid-19 was having none of that. The virus bit back, and a second wave wreaked even more social and economic havoc, leaving a swathe of companies financially weakened, with many still trading under significant restrictions.
With a Covid-19 vaccine finally here, we predict an economic boom in the US – private-sector capital-raising is already at unprecedented levels. We are seeing an increase in the number of SPACs* or ‘blank cheque’ companies popping up; it feels like anyone and everyone is looking to raise funds. This will almost certainly lead to bad deals being done in a rush to market.
With rushed deals comes a very high chance of failure, inevitably leading to D&O claims. This could extend the hard market cycle for a further 24 months. We predict tough times ahead for clients and brokers who buy D&O in 2021.
*Special Purpose Acquisition Company – this is a listed vehicle that is pre-funded by backers and set up ready to acquire a portfolio of businesses that look ripe for investment.
By Rachel Cohen, Senior Treaty Broker at New Dawn Risk
2021 will see casualty treaties impacted by an accelerating hardening of reinsurance rates, restricted terms and conditions, and reduced capacity as the losses from Covid-19 continue to bite.
There are already several US D&O class actions related to Covid-19 but liability claims are typically long-tail with a lag in reporting, so general liability and workers’ compensation claims related to Covid-19 have yet to filter through. However, we predict that there will be a significant rise in these loss notifications starting in 2021 and continuing over the next few years.
Several outbreaks of coronavirus have already been linked to high-risk environments, such as gyms, hotels, casinos, care homes, cruise ships or food/meat processing plants. There is a significant likelihood that all these environments will be sued for not taking proper care of their clients, either by allowing them to enter against the government rules, or by failing to provide a Covid-19-safe environment. The same situation will apply to workplaces, resulting in a rise in employers’ liability / workers’ compensation / employment practices liability claims, due to companies not taking the adequate steps to make their workplaces Covid-19 safe or forcing their employees back into the offices unnecessarily or against their will.
There are already liability losses affecting cruise line companies where passengers brought the Covid-19 virus back onto the ship after a day trip, as staff did not adequately assess them before allowing them to re-embark. We expect more of these claims to come to fruition within the next year or so, with a knock-on effect in terms of pricing and coverage for reinsurance treaties.
New Dawn Risk’s report casts light on the improved prospects for international firms as India aims to deploy drones, satellites and mobile technology in an effort to cut insurance costs
Download the white paper here.
Singapore, November 2nd 2020: Lloyd’s broker New Dawn Risk has today launched its new report: Technology brings new opportunities for India’s crop insurance scheme
The report details changes that have been made to the government-sponsored scheme during 2020, which are designed to make it more efficient and ultimately more attractive for the nation’s farmers and for participating insurers. These include the introduction of a three-year contract for insurers; and strict rules to both prevent delays in claims handling and avoid moral hazard.
The centre point for change, however, is the introduction of a range of new technologies, including a mobile portal, and the use of sophisticated drone and satellite technologies. All of these are designed to allow automated handling of the many claims that the scheme generates, and, ultimately have the power to transform the profitability of the scheme for insurers and reinsurers.
Contributing to the report, the Agricultural Insurance Company of India commented: “With the advent of new concepts in agriculture, the scope for crop / agriculture insurance in India is vast. The main challenge is consistency. The scheme has changed drastically in a very short space of time. Reinsurers believe there is ample opportunity but only if they decide to commit to this product for the longer term and take a long-term view despite the changes.»
Max Carter, CEO of New Dawn Risk commented: “India could certainly see new reinsurers entering its state-sponsored agricultural insurance market if costs were driven down for the local insurers, who have previously borne heavy administrative and operating costs.”
“The increased use of satellites and drone imagery technology and adoption of high-quality mobile apps to carry out CCE’s, remote sensing methodologies to assess crops and low-lying satellites (LEOs), means that India has taken positive steps towards increasing efficiency and reducing costs of administration. We hope that, with such positive news, our guide will be a useful source of information for international reinsurers who might consider participating in this refreshed scheme.”
For more information: Victoria Sisson, Luther Pendragon, +44 (0)7941 294872
London, October 27th 2020: The London chapter of PLUS (the Professional Liability Underwriting Society) met last week for a webinar to talk through the evolution of the market, in a session entitled “London, You’re on Mute! The New Normal”
In a sign of both the importance of the topic, and the growing usage of virtual events, a record 160 members of PLUS in both London and North America gathered to debate the topic alongside panel members:
- Julian James, CEO, Sompo International
- James Masterton, CEO, Ardonagh Specialty
- Kim Noble, Senior Vice President, Thompson Flanagan
- Chris Warrior, Head of Commercial Management Liability UK, Berkshire Hathaway Specialty Insurance
- Brenna Westinghouse, Focus Group Leader and Underwriter, Professions PI, Beazley
The panel was moderated by Max Carter, CEO of New Dawn Risk.
Following the debate, the audience was asked for their views on how the market is currently working, and the results were positive. Of 160 members polled:
- Only 14% of respondents wanted to return to work full-time in their office.
- 16% of respondents said they would want to work mainly at home permanently, while 70% would want to spend half their time in the office.
- 38% said that they were more productive since Covid-19, 44% said that their productivity had remained the same, and 18% said it had fallen
Max Carter, CEO of New Dawn Risk and Moderator of today’s PLUS webinar commented “This debate brought broad consensus that the way we work has permanently changed. For an industry that has not historically been known for thriving with technology, the market was able to adapt quickly and continue trading without missing a beat during 2020, and this has helped acceptance.”
“Relationships have been the hallmark of the success of the London Market in the past. If we are to have continued success in the future, we have to find ways not just of maintaining existing relationships in this new working environment, but of forging new ones.”
“The situation that we are currently facing is unprecedented; there is no established playbook or roadmap for navigating our way through it. That’s why events like this week’s PLUS debate are so important. We might not have all the answers, but reaching consensus on the questions we should be asking is an important step in the right direction.”
For more information: Victoria Sisson, Luther Pendragon, +44 (0)7941 294872
The article below, by Rachel Cohen, Senior Treaty Broker at New Dawn Risk, was originally published in the Middle East Insurance Review in September 2020.
Prior to the global pandemic and subsequent lockdown that occurred towards the end of March, the reinsurance sector had certainly seen some hardening of rates in the 1 January 2020 renewals, compared to what had been experienced in the past.
In the international casualty treaty sector, this hardening was more prevalent on loss affected programmes. Reinsureds were enjoying more and more increases in underlying rates, in particular on D&O and the professional lines of business, where increases were anything between 25% and 200%, even where accounts were claims-free. However, it could still be argued that rates were still not quite where they should be, mainly due to the excessive capacity in the market. As has always been the case, there was still a gap between the hardening of rates on the underlying business and the increase in the reinsurance pricing, although this gap was certainly becoming smaller.
Deteriorating results
In addition to this, the spotlight in the last six to 12 months before the pandemic had been shining brightly on the casualty lines of business, especially on the reinsurance side, which was never the case in the past. Lloyd’s was starting to voice its concerns over the long-term profitability of this sector.
In 2015 and 2016, the softening of terms and conditions in the international casualty market was paramount. There was an abundance of capacity and an absence of any severity or systemic losses, which meant that rates were at the bottom of the cycle or were approaching bottom. Fast forward to 2019/2020 and it became very clear that there was a plethora of under-reserving of claims in the past years and the prices charged by reinsurers were unsustainable, meaning the profitable results in many reinsurers’ casualty books were fast deteriorating.
Shifting sentiments
Although it is still very early days in terms of quantifying the impact of the pandemic on the underwriting results, it can certainly be said that reinsurers are more nervous than ever before. Their concerns over the challenges of insufficient reserving on casualty lines of business and inadequate pricing still remain, but now there is much more caution from reinsurers on writing any new business on their books, regardless if the casualty class in question is deemed to be potentially impacted by COVID-19 or not. This is because closer scrutiny by internal management is now even more prevalent across all reinsurance teams. There is not just scrutiny in terms of price, but much more close attention is now being given to wording coverages and more questions are being asked over any existing clauses in contracts that could be construed as ambiguous. It is still difficult to predict how the reinsurance rates will move as a result of the pandemic; in the next few months this will become much more apparent as reinsurers slowly begin to assess any potential pandemic losses.
Looking at the casualty treaty programmes for New Dawn Risk’s UAE clients that have been placed in the last four months, the main challenge is to make sure reinsurers are comfortable with the reinsureds’ assessment of COVID-19. Many questions have been posed to the client, for example are COVID-19 exclusions being put on the original policies? What exposures do they think they may have to COVID-19? Have there been any loss notifications so far? The main concern that reinsurers currently have is about picking up any additional exposures to COVID-19. Certainly, in the UAE, the majority of clients are imposing a COVID-19 specific exclusion or the communicable disease exclusion, both of which have been published by the Lloyd’s Market Association. There are also questions being raised as to whether insureds will see this as an opportunity to pursue claims where they would not necessarily have pursued previously, as a way of attempting to recoup money lost as a result of the pandemic.
Increasing rates
In the Middle East, there has been an increase in the number of casualty losses in the last couple of years, and it remains to be seen if these losses will increase post COVID-19. For the first time in a very long while, independent of the pandemic, there are underlying rate increases being seen in the UAE on bankers blanket bond and D&O business, which may be a sign of things to come if reinsurers start to feel the impact of the pandemic.
For the major part, it seems the reinsurance industry has been largely unaffected by the lockdown. One of the most integral features of the insurance and reinsurance market is the relationships between brokers, reinsurers and clients. However, the lockdown has proven that business can just as effectively be placed in the market with all parties working remotely. Brokers have probably been impacted by the lockdown more than underwriters as negotiations are much harder to carry out effectively over a video call rather than face-to-face at the Lloyd’s box or in a meeting room.
In addition, brokers who started 2020 very successfully with new business forecasts being met have now been faced with a big challenge in being able to meet their new business budgets for the next few months. Many businesses across the world will undoubtedly no longer be able to operate and others are no longer able to afford the big insurance capacity they previously purchased. In addition, premiums paid by clients to brokers and reinsurers are being delayed as businesses struggle with their cash flow.
Evolving loss picture
Business interruption cover given in property reinsurance covers is predicted to make up the majority of pandemic-related losses, while event cancellation and medical malpractice risks will also be impacted. There are also other policies, in particular cyber insurance, general liability or environmental policies, which may be available to meet third-party claims and therefore need to be considered.
Since the intention of D&O insurance is to protect a company’s board of directors and senior officers against claims, investigations and associated defence costs in relation to their actions in the course of managing
the company, this means that many COVID-19-related claims are expected to fall within the insuring clause of the policy. In the US, securities class actions have already been filed against corporations and their senior management in relation to COVID-19. As an example, it is alleged by investors that Norwegian Cruise Line Holdings misled customers with unproven or false statements about COVID-19, enticing them to buy cruises. In addition, Inovio Pharmaceuticals made false and misleading statements about a COVID-19 vaccination that it was producing. In both actions, it is alleged that the value of the company’s shares fell dramatically because of disclosures about the company’s true positions.
The knock-on effect of these pandemic-related claims is that all underwriters will be considering policy wordings carefully going forward and the need for specific exclusions for COVID-19-related (or more generally virus-related) losses. Certainly in the D&O space, both in the UAE and on a global scale, insurers and reinsurers are imposing more restrictions, but more concerning is that they are already drastically reducing capacity, looking to push rates even further, and squeezing commission rates. This may be the sign of things to come at the 1 January 2021 renewals, particularly in those classes of business mentioned above that are potentially facing the most serious impact from the virus. As everyone knows, reduced capacity is a catalyst for a hard market. The heightened scrutiny on renewals will continue and there will certainly be some reinsurers who will be reserving their capacity for renewals only.
Continuing uncertainty
The extent to which reinsurers can withstand continued asset-side volatility and increased claims emergence remains to be seen. Reinsurers have started to de-risk their balance sheets by holding cash, which will have
a significant impact on investment returns. The two biggest Indian insurance companies, GIC Re and New India, have already been downgraded in the wake of the pandemic, and this possibly could mean a bleak future for other currently A-rated insurers and reinsurers across the world. These downgrades may certainly pave the way for opportunities for other prominent players in the market, as well as a chance for brokers to capitalise on their relationships with London and other leading international reinsurers.
The original article can be viewed here
Early September means Monte Carlo, and its physical absence has created a big hole in the 2020 reinsurance calendar, in spite of the excellent virtual initiatives that have been created.
The problem is that its absence will create a real communications gap. The opportunity to informally have discussions with contacts who we might otherwise never see, is an invaluable oil in the wheels of major reinsurance and capacity deals across the market. That face-to-face interaction not only helps bring together ideas, allows capacity providers and backers to set up opportunities for new business ventures and structure complex reinsurance programmes; but it also gives everyone an opportunity to get real transparency over barriers that might hinder the signing of deals that are underway.
Monte Carlo gives a window to brokers to extend negotiations and to get the most difficult deals done, and its absence could exacerbate some of the existing problems in appetite for new business among insurers and reinsurers in the London market at present.
Meanwhile, we have also now undoubtedly arrived at a hard market. Within New Dawn Risk’s field, (the casualty and specialty market), this means the reinsurers are in control and will, to a large part, be able to dictate terms to brokers and cedants. For brokers this means negotiations will become more difficult and commission will undoubtedly also be squeezed. Cedants must expect that prices will be flat at best, terms will be tightened, capacity reduced and the number of exclusions increased.
Reinsurers won’t be pushed into deals that don’t tempt them. In 2020 they will have the option to walk away. All of this behaviour is reinforced, not just by hardening pricing, but also by the increased focus on deal scrutiny by internal management. New business is harder for reinsurers to get across the line internally, and we see this lack of appetite as being particularly acute in the treaty market. No one, it seems, is currently actively looking for new treaty business. All in all, this reinsurance season could be challenging for all parties, and we will be working hard to mitigate this for our clients.
Max Carter and Rachel Cohen
New Dawn Risk Group Limited, the international specialist insurance intermediary, has announced it is entering into a partnership with Singapore-based SpecialistRe, to strengthen its reach and offering across China, Japan and South-East Asia.
Max Carter, CEO of New Dawn Risk, commented: “At this time of unprecedented change, Asia is powering growth in the global insurance industry. We have been tracking opportunities in the region for some time, and our new partnership with SpecialistRe – a well-established presence in Singapore – will help us to deliver experienced expertise for treaty reinsurance in the specialty space. As we further extend our international footprint so we can best meet the evolving needs of cedants and reinsurers, we will continue to maintain our core focus on professional indemnity, financial and specialty liability lines, as well as accident & health, both on the direct and on the reinsurance sides.”
SpecialistRe was originally established in Malaysia and has been operating in Singapore since 2015 as an advisory and consulting firm with a strong focus on treaty reinsurance. SpecialistRe utilises technology in association with its insurtech partners to provide fast and innovative risk transfer arrangements for its network of cedants across Asia.
Andrew Harris, Managing Director at SpecialistRe, said: “We are delighted to be partnering with New Dawn Risk at this time of evolving change in the reinsurance market. The ability to provide independent treaty capability in these specialist growth areas is an exciting development that will allow us to broaden the range of solutions we can provide to clients.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary and a Lloyd’s broker providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.
For further information contact: Victoria Sisson, Luther Pendragon, +44 7941 294872
By Nicky Stokes, James Bullock Webster and James Barrett of Lloyd’s broker New Dawn Risk
2020 has been a year of unprecedented turmoil across every aspect of life and this has been reflected in the insurance industry. While much of the immediate noise around claims has focused on business interruption insurance, there is a longer tail of impact that sits across the liability spectrum, most clearly seen in the classes of D&O, medical malpractice and cyber insurance.
A wave of D&O claims
Few classes will feel quite the same impact as directors and officers (D&O). It is easy to forget that even before the onset of the pandemic the D&O market worldwide had already been hardening over the preceding 18 months. This process has subsequently accelerated with D&O rates up 44% in the first quarter of the year according to a study from AM Best. Markets have been cutting capacity, increasing retentions by multiples and pulling out of some sectors completely, such as the hospitality and airline industries, as well as anything on the fringes of their core appetite.
The reasons are clear. A number of class actions have already emerged in the US against companies and their managers in connection with COVID-19 that may lead to claims on D&O policies.
Video conferencing provider Zoom, which has become a household name since the start of the pandemic, was hit with a class-action lawsuit by one of its shareholders, who alleged the company failed to disclose issues with its platform’s privacy and security.
Elsewhere, in one example in the pharmaceutical industry, biopharma company Sorrento Therapeutics and its officials have been accused of making misleading comments about a COVID-19 “cure”, which has triggered a securities class action lawsuit on behalf of investors.
Insolvencies and worker class actions to rise
Meanwhile, company directors will also face a number of exposures which could see them facing investigations, claims and prosecutions, for example, for wrongful trading, fraudulent trading, misfeasance or breach of fiduciary duty. We can also expect D&O claims from other sources. Management may be exposed to risks related to the way they have dealt with the process of putting staff into furlough, laying them off, or reducing their salaries and working hours.
Suppliers and creditors are also going to be affected. It’s likely we’ll see a number of speculative and opportunistic claims, especially in the more litigious environments. Although these may not succeed, the costs incurred in defending these claims have the potential to be substantial.
All of this translates into ever tougher conditions for new and existing purchasers. It is not difficult to see a future in which D&O insurance in certain markets is no longer available or affordable, or provides the coverage expected or required. The industry is going to have to think creatively to effectively manage and transfer D&O risk in a sustainable way. This may include greater use of self-insurance and captive insurers, but the D&O market needs to come together to pool its knowledge and experience to deliver innovative solutions.
Medical malpractice sees radical constriction of appetite
Smaller Allied Health and Long-Term Care facilities in the US had already been struggling with an increasingly poor claims record in the years before COVID-19. The market had also been impacted by historic underpricing of risk and the increased cost of claims due to social inflationary pressures. Those insurers who had marketed policies with a $0 deductible have suffered the most, resulting in adjustments to appetite.
In spite of this the market remained well-supplied, with many insurers at Lloyd’s still remaining positive and even looking to grow their Allied Healthcare books up until now. However, COVID-19 has now caused a rapid and dramatic shift in appetite among insurers, one which many smaller healthcare providers have yet to understand, but which will become clear to all during the next round of renewals.
Most insurance companies now expect a significant increase in medical malpractice claims relating to COVID-19, particularly for the smaller health providers, such as care homes, in-home care providers and hospices. There is an expectation that law firms are likely to look for opportunities to bring class actions against this type of care providers where, for example, it can be shown that lack of PPE may have contributed to some COVID deaths.
As a result, many insurers have become extremely specific about which risks they will consider. Many will only look at health providers in a state with a more benign claims record; or require evidence from the insured to demonstrate exceptional risk management procedures are in place to handle COVID exposures. Insurers in Lloyd’s have developed long lists of US states, drilling down to county level, of where they will not consider taking a risk. Examples of no-go areas include Cook County in Chicago, the five boroughs of New York and increasing concern for insureds domiciled in the state of New Mexico.
Other insurers have introduced COVID-19 exclusions (or communicable disease exclusions) on all renewals, including some of the recent series of wordings recommended by Lloyd’s itself. The more radical of these exclusions include refusal to provide cover for facilities that are doing any testing for COVID or are seeing any patients with COVID-19. Obviously, such exclusions cannot be applied to larger hospital groups (many of which, in any case, have their own captive insurers), but they are being put in place for smaller facilities, care home groups and in-home providers. Insurers placing these types of exclusions across their entire portfolio are luckily in the minority, but it is still a concern for the market.
Prices are also hardening, and current rate increases are already moving towards 15%. We expect rate increases to continue over the coming year, with insurers beginning to place reserves and prepare for the influx of COVID related matters to flood in over the next 12 to 18 months. All those in this category should expect to see double-digit price increases, depending on their individual situation.
The good news is that most insurance companies are at least not denying renewals to existing insureds, even if offering them at higher prices. However, choice of other insurers will be much reduced. In summary, the mid-tier and smaller healthcare provider medical malpractice market in the US is looking ahead to challenging times, and will find renewals, whether insuring internationally with Lloyd’s or domestically, much more difficult than they had previously.
Cyber stays steady as other classes see seismic shifts
Meanwhile there is happier news elsewhere. Cyber is one of the few classes of business that has not been significantly negatively impacted by COVID-19. Policies have not required significant rewording, and the London market has continued to see a flow of submissions, as well as enquiries for both renewals and new business from the domestic and international markets.
There has been some discernible caution from first-time buyers, reflecting the fact that cyber remains primarily a discretionary spend, unless a company is buying cover to meet the conditions of a contract. This has, however, been counterbalanced by the fact that that many companies have a majority of their staff working from home and may do so for the foreseeable future. This has led to concern about an increase in attempted cyber breaches. Companies also now typically have a heightened awareness of cyber criminality and are beginning to look for protection against it. They want to know that the right processes are in place in terms of monitoring, controls and supervision. Companies look at how to train their staff; and beyond this may also budget for an increased spend on cyber insurance.
One of the longer-term impacts of the pandemic has been the increased global tension with both China and Russia. While global leaders play politics with human lives in front-line locations such as Hong Kong, the cyber war continues to accelerate for everyone. It is widely acknowledged that the Chinese are exceptionally active in the cyber space, and that this is not just state-sponsored criminality. China, North Korea and Russia are all home to well-organised cyber-crime syndicates, who are likely to take advantage of fluctuating working locations and conditions caused by the pandemic.
Overall, the future of cyber insurance over the next year is likely to be linked to the bigger forces at play in the market. The huge claims arising from COVID in other areas such as BI are like to drive up prices and bring a harder market to all classes of business. With a global recession reducing total premium size, wordings are also likely to become tighter. This will be a shock to a class of business that has, until recently, suffered from an oversupply and soft pricing. Our expectation is that this will ultimately lead to an increase in cyber cover coming into Lloyd’s as other markets dry up, and buyers of scale find they need to look further afield.
In this area, as in almost all others, the impact of COVID-19 can ultimately be summarised in just a few words: a higher cost for the insured, with a restricted offering on cover. Challenging times are ahead for all, no matter what class of business.
—Ends–
Nicky Stokes is Head of Management Liability and Financial Institutions, James Barrett is Head of Professional Risks and James Bullock-Webster is Head of Tech, Media and Cyber at New Dawn Risk
