Swiss Re can’t be convinced on cyber; wordings & rate gains don’t cut it

Swiss Re remains largely unimpressed by the rate gains and tightened exclusions in cyber insurance, convinced that aggregation risks remain too much of an unknown to merit a venture into the line at nearly any price, a top company official has indicated.

“The accumulation if risks is problematic,” Swiss Re CFO John Dacey (pictured) told his company’s Q1 earnings call. “The challenges in this line remain and what we are doing right now is spending time with partners figure out how to mitigate the risks and manage down the po loss potential of the business that we do.”

And that business that Swiss Re does is not so very substantial. Dacey pout the 2022 year-end in-force premium sum in P&C Re plus the primary commercial unit at neighbourhood $600 million with warning not to look for upside.

“We have no intention of growing this in any material way in the course of 2023,” Dacey said.

Dacey will give a very light tip of the hat to pricing improvements and industry-wide tweaks to wordings that have captured headlines in 2022 and 2023. But improvements are not adequacy.

Price-wise the market has improved “directionally” and the exclusions on state-sponsored cyber events is an improvement.

“I don’t think the combination makes us enthusiastic about the segment,” Dacey said. State-sponsored agent is a slippery concept and the wise underwriter will also be worried but “other potential actors, working to simultaneously across geos, across industries for reasons which might not be obvious.”

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