Cyber Risks continued to see strong rate increases of 40% (2021: 88%) leading to an increase in gross premiums written of $1,156.1m (2021: $814.3m).
Our market leading cyber insurance offering protects businesses against cyber threats by building resilience and minimising risk. Beazley is a pioneer in Cyber insurance and has led the way in the development of an effective cyber ecosystem which protects clients, before, during and after a cyber incident and in the creation of the market’s first cyber catastrophe bond.
Global Head of Cyber Risks - Cyber Services
A successful year
New business was strong across all geographies with our business outside of our core US client base growing exponentially. In the US, we are seeing strong demand from the mid-market segment which is driving ongoing growth. Outside of the US, demand came from Europe, Asia, Australia and beyond and we expect this trend to continue as business becomes increasingly aware of and keen to protect itself from the Cyber threat. The substantial rate increases we have seen over the last two years, did begin to moderate during 2022, but they remained at very significant levels, reflecting the scale of the challenge that Cyber poses.
Our positive result reflects the good work we have done since October 2020, to build our Cyber ecosystem, which focuses on pre-underwriting and post-loss mitigation efforts. In 2022 we also added our threat intelligence and Beazley Cyber Council to this offering.
To reflect the demand we are experiencing and to respond to that opportunity, the team has continued to grow during the year. We’ve invested in people, expertise and resources across the globe. We also made specific investments into threat and intelligence pilots during 2022, of which, the successful ones, will become operational during 2023.
Adapting now, to grow tomorrow
We are a market leader in Cyber and we believe we need to use that position to address the challenges the market faces. In 2022 this saw us tackle the issue of Cyber catastrophes. To date no cyber attack has been big enough to create a widespread breakdown in essential services; however, we have modelled the possible scenarios and believe now is the time to actively build market awareness and the capital needed to address the threat as the market grows.
Looking ahead, we believe that the flattening of rate increases will continue through 2023, but we expect that to just be a moderation in what have been substantial, but required, rate increases over the last two to three years. We expect to see continued strong new business demand, particularly outside of the US, where we see the mid-market as the largest area of growth for our Cyber products and services. In Europe and across the globe, we are seeing large corporations seek greater Cyber protection and expect the level of demand to continue. Our continued focus is on maintaining and advancing our knowledge and understanding of the Cyber threat, and maintaining vigilance about the threat actors and their changing methods of operation as we move forward.
In January 2023 we launched the market's first cyber catastrophe bond and with strong demand from investors we expect to be able to launch additional tranches through 2023 and beyond.
Through the equity raise in 2022, we are also looking to retain more of the business which we write, and capitalise on future profitability in this division.