What changes await the insurance markets?
The insurance industry will experience a price increase, as Munich Re predicts in its analysis "Dynamic of reinsurance markets". The main causes can be summarised as overcapacity and low loss expenditure in European markets in addition to the interest rate, which will continue its downward trend due to the pandemic. This will lead to a reduction in profitability for both insurers and reinsurers, and the pricing of cover will be tightened in order to maintain profits.
THE GROWTH OF CYBER INSURANCE
The coronavirus pandemic has also indirectly affected the cybersecurity segment: closures forced most office workers to follow their activities from home and many companies to migrate many commercial operations to cyberspace, while there was a sharp increase in cyberattacks.
In order to ensure sustained growth of cyber-business, Munich Re claims to follow a comprehensive strategy of assessing existing risks on an individual basis to identify systemic trends and seek out prices, terms and conditions commensurate with the risk.
The company notes that this segment remains one of the most important strategic growth areas. "And the additional impetus by the digitalization pandemic and the growing awareness of companies about cyber risks can further boost a market that already shows solid growth. In fact, the cyber insurance market could even exceed the current growth forecast, from just over 7 billion dollars in 2020 to around 20 billion in 2025" concludes the German Group's analysis.