Many will remember 2023 as a year filled with volatility — and they wouldn’t be wrong.

Although we entered the year with improved cyber market pricing for insureds, the frequency and severity of incidents increased across the board. Notably, ransomware led the way with a 61% spike in severity that amounted to an average claim of more than $365,000.

Despite the increased claims activity, the cyber insurance market worryingly lacked discipline throughout most of the year, trading short-term growth for long-term profitability. Our philosophy is never to react impulsively to market cycles. That drastic change rarely serves the customer well. From our perspective, navigating the market with purely a pricing strategy is a fool's game.

Instead, we depend on our technology and human expertise to monitor the risk landscape, keeping our underwriting timely and accurate while allowing for minor adjustments to minimize impact — it’s why Coalition policyholders experience 64% fewer claims than the industry average.

So, how did we react to market volatility?

We stuck to our mission of protecting the unprotected, seeking out new markets and new customers in need of a better solution to cyber risk.

In the past year, we brought our solution to more customers, expanding into new geographies, new market segments, new products, and even new languages. We also hired exceptional people and invested in solutions to deliver better, more robust offerings to policyholders worldwide.

Let’s look back at Coalition’s global growth in 2023.

United Kingdom

We started the year with a bang in the U.K. by becoming a coverholder at Lloyd’s. Doing so just four months after our official U.K. launch in September 2022 put Coalition in a long-term position to write and service policies in licensed territories around the world.

In March, we further solidified our place in the U.K. market by launching Coalition’s excess cyber product to help brokers who had struggled to find sufficient coverage for their larger clients. With support from Lloyd’s and Allianz, our excess offering provides full-follow form coverages up to £10m above primary layers for both cyber and technology professional indemnity (PI) lines.* 

Every step of the way, our team made a point of meeting with as many brokers as possible. Across hundreds of meetings, dozens of lunches, and a handful of conferences, two things have become abundantly clear:

1. Brokers want the best for their clients and recognize the need for a new solution to cyber risk.

2. Active Insurance is unlike any other offering in the U.K. and can be an invaluable asset to small businesses.

As my colleague Tom Draper wrote on Coalition’s first anniversary in the U.K., our numbers speak volumes. We’ve onboarded more than 3,000 brokers, doubled our team headcount to support the rapid growth, and expanded our reach beyond just the London market.

Canada

After first entering the Canadian cyber insurance market in 2020, we brought our offering to Quebec this year. With capacity provided by Lloyd’s and Arch, brokers in the province can now quote Coalition’s Active Insurance for businesses with up to $1 billion in revenue.

The expansion to Quebec was our first foray into a non-English language market — a massive testament to the work of our Canadian team. Coalition’s Cyber and Tech E&O policies and endorsements are now available in French, bolstered by French-speaking broker contacts and support staff, alongside a French-translated website and support center.

In September, we also announced a long-term partnership with HDI Global Specialty SE, who will join our Cyber and Technology E&O panel in Canada in 2024.

I’m astounded to see how much of an impact that Coalition has made across Canada in just three years. We’re already a clear leader in the Canadian cyber insurance market — and with new partners and products in place, we expect tremendous growth in the coming years.

Japan

While Active Insurance hasn’t yet made it to the Japanese market, our proprietary cyber risk platform is already enhancing the security posture of Japanese small businesses that may lack sophisticated protections.

The technology that powers Coalition Control™ is now being used in the MS&AD Cyber Risk Finder, a cyber risk assessment service built by MS&AD Insurance Group. The service provides diagnostic reports to businesses, including personalized vulnerability scores, identified weak access points, and a prioritized list of actions to take toward remediation.

Partnering with MS&AD Insurance Group, the largest non-life insurer in Japan and across the Association of Southeast Asian Nations (ASEAN) region, allows us to bring digital cybersecurity solutions to one of the world’s largest economies. As cyber-attacks continue to increase globally, it’s vital to our mission that we make Coalition’s continuous security monitoring and active risk management accessible to those who need it most.

Australia

Closing out 2023 with the same energy as when we started, Coalition brought Active Insurance to Australia in November, marking our expansion into a fourth global insurance market.

The move to launch in Australia couldn’t come at a more critical time. Despite the fact that  many in the country are increasingly experiencing cyber attacks, only one in five Australian small businesses currently have cyber insurance. 

We recognize these businesses need Active Insurance to combine comprehensive insurance coverage and active security protection to help safeguard against future cyber attacks. We’re also grateful for our continued partnership with Allianz, who provides capacity for our Australian offering, as well as our U.S. and U.K. cyber insurance programs.

Welcome to 2024

The world is a big place. While it’s always nice to reflect on what we’ve accomplished, our job is far from complete. 

The global insurance market represents more than $1.8 trillion in annual GWP, of which cyber insurance represents only 0.8%. Purchase rates in the European small business marketplace remain in single digits, and the figures are even lower elsewhere.

While some may be feeling frustrated by slow-and-steady adoption, we view these numbers as a tremendous opportunity to drive market growth in 2024 and beyond.

More than ever before, we see that businesses are in need of a solution to fight back against digital risks. These businesses are vulnerable to cyber threats and may not even be aware that cyber insurance — Active Insurance — has the power to improve their security posture and help prevent digital risk before it strikes.

In partnership with our brokers and agents, Coalition is committed to helping more businesses in each of our current markets, identifying new markets to increase access to Active Insurance, and fulfilling our mission of protecting the unprotected.

*Exclusions and limitations apply. See disclaimers and the policy as issued.

This blog post is designed to provide general information on the topic presented and is not intended to construe or the rendering of legal or other professional services of any kind. If legal or other professional advice is required, the services of a professional should be sought. The views and opinions expressed as part of this blog post do not necessarily state or reflect those of Coalition. Neither Coalition nor any of its employees make any warranty of any kind, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, product or process disclosed. The blog post may include links to other third-party websites. These links are provided as a convenience only. Coalition does not endorse, have control over nor assumes responsibility or liability for the content, privacy policy or practices of any such third-party websites.