Ferma Insurer TV panel: Experts say European cyber rates will stabilise in 2025

Serene Davis, global head of cyber at QBE Insurance, and Gamze Konyar, head of cyber and SVP at Marsh Europe, told The Insurer TV they expect the softening in the European cyber market to decelerate in 2025 and for dynamics to align more with the US market.

On the sidelines of the recent FERMA Forum, Davis and Konyar took part in a cyber panel hosted by The Insurer TV and were joined by Paul Handy, global head of cyber at Crawford & Company, to discuss the current trends in the market and their expectations for 2025.

“There tends to be a delay between shifts in the US market and when they finally reach London and Europe,” Davis said. “In the US, we’re already seeing signs of stabilising rates, which often serves as a precursor to similar trends in Europe.”

Konyar echoed this, predicting further rate decreases at the start of 2025 and market stabilisation soon after.

"Europe’s cyber rates are following the US trend. We anticipate more decreases in early 2025, but then a stabilisation as the market settles,” she said.

This slowdown follows an exceptionally soft market, with Konyar noting that rates fell by an average of 11 percent in Q3 2024.

“From a Marsh portfolio perspective, we observed an 11 percent rate discount in Q3 2024 on average. Larger reductions are occurring among higher-revenue bands, while smaller reductions are seen in lower-revenue bands,” Konyar explained.

Davis added that the continued pressure on rates in Europe is partly due to this new capacity.

“There’s plenty of capacity coming in, and we’re seeing it globally,” she added.

“What were once emerging cyber markets in the US are now establishing themselves in Europe and you see this reflected in capacity and rate pressures and in hiring trends – it’s clear there’s a strong focus on European growth among carriers worldwide,” said Davis.

Konyar saw capacity being drawn to the space due to improved aggregation modelling and cyber insurance becoming more profitable than initially expected.

“Improved aggregation modeling, cyber insurance being more profitable than it was expected to be, plus improved security measures. They all led to more capacity entering the european market,” said Koyner

Cyber has not been hit by the same claims inflation as other lines, Crawford’s Handy explained, which he said might explain the market’s ability to withstand the softening the market has experienced until this point.

“We're seeing a little bit less claims inflation in cyber,” he said. “I mean, the reason for that is that cyber isn't really a materials-heavy claims market.

“We're not rebuilding properties where you see a lot of inflation. We are seeing it to a degree, the cost of labour and the supply chain issues that come through in the claims that we see. And it does impact the cyber BI exposures, but I don't think it's as much as some of the more traditional lines of business and the claims inflation that we've seen in those,” said Handy.

Watch the 12-minute discussion for more insights on the cyber risk landscape in Europe, factors driving it and what we can expect in 2025.