More and more companies are being attacked by hackers – but cyber insurance alone is too expensive for many traders.
(Photo: obs)
Frankfurt Industrial insurance remains difficult, and there is fierce cut-throat competition in the private customer insurance business. Insurers are therefore increasingly focusing on small and medium-sized businesses as customers. The premium volume of commercial insurance amounts to 13 billion euros.
The Zurich Group recently launched an offensive with a focus on small and medium-sized companies. The insurer HDI is also active in this segment. There are also new digital attackers such as the Provinzial spin-off Andsafe and the online commercial insurer Mailo.
The increasing interest of insurers is basically good for customers: Driven by digitization, there are better tariffs, more individual products, more comparable services and falling premiums, observes the online insurance broker Finanzchef24 in its current commercial insurance report.
However, the Insurtech restricts that not all branches could record falling annual premiums. In some areas, insurance customers would even have to dig deeper into their pockets.
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After the natural disasters this year, the platform is currently seeing more demand for elementary insurance in particular. “We are assuming that there will be a tendency for these products to be in greater demand in the medium and long term, even without acute or current events,” says Tobias Wenhart, Co-Head of Finanzchef24.
Prices for manager liability are increasing significantly
Customers can now see the added value and are ready to pay the extra price. Elementary protection is usually taken out as a supplement to commercial building or content insurance – the household insurance for businesses.
In the course of the corona crisis, Finanzchef24 also observed increasing demand for legal protection and manager liability insurance. Manager liability protects board members and supervisory boards against claims by the company and third parties.
After a price war in recent years, many insurers have recently changed their conditions for manager liability: in some cases, prices have increased significantly, some insurers have completely stopped underwriting, others have tightened the underwriting guidelines significantly.
“For the most part, we see prices rising sharply for the premiums because the loss ratios have increased,” says Wenhart. Sensational cases at large corporations aggravate the situation further: the insurers around ex-VW boss Martin Winterkorn had to pay compensation of 270 million euros to the car manufacturer for the diesel scandal.
Cyber policies have not yet reached commercial customers
Due to the increasing number of hacker attacks, cyber insurances have also come more into focus. More and more often, criminals are encrypting data and then demanding a ransom. “In Germany, ransomware attacks account for around 60 to 70 percent of all damage that companies report to cyber insurers,” says Johannes Behrends, head of the Cyris unit at insurance broker Marsh Germany. The premiums for cyber policies in this country across all companies have recently increased by around 40 percent compared to the previous year.
Marsh focuses primarily on industrial insurance, but also serves commercial clients. In this segment, the number of claims has so far been comparatively low. “The premium increases are therefore moderate here,” explains Behrends. However, he fears that smaller companies will not notice many attacks at all or only very late and will not take the risks seriously enough. As suppliers to larger companies, they are often the gateway for hackers.
Finanzchef24 also observed less interest than expected among small business owners. “Cyber insurance has not yet arrived in the commercial sector,” says Wenhart. For many traders, the policies are too expensive as stand-alone products. As a component of other insurances, such as property damage liability, the protection against cyber risks works better. Small business owners could insure themselves here at adequate prices.
The future of business closure insurance is uncertain
Public liability is the most important division – the portal has had the highest volume for a long time. Here the premiums have fallen slightly on average recently. After a significant drop in prices in 2014 and 2015, the premiums for property damage liability insurance have now leveled off at a lower level.
It will be exciting to see what happens to the business closure insurance after the corona crisis, said Wenhart from Finanzchef24. In the course of the lockdowns, numerous restaurateurs and insurers had argued over liability and the interpretation of the insurance conditions.
Some insurers are currently withdrawing from the sector, most of them are now ruling out pandemics and general injunctions. It is difficult to convince customers that they need this protection.
More: Munich Re wants to expand cyber insurance business