SIRC 2026: Rate adequacy for financial lines in focus as risk environment becomes complex

November 3 2026 by and

Rate adequacy for financial lines, including cyber, remains an active discussion across the industry, particularly after several years of pricing pressure in certain segments, according to Emily Poh, head of APAC financial lines at Sompo in Singapore.  

“Market competition remains strong across most financial lines products,” Poh said. “Capacity is broadly available, and claims activity has been relatively stable in several areas, with cyber being a more nuanced exception. 

“This continues to create pricing pressure, particularly for well-managed risks with strong loss performance.” 

However, the risk environment is becoming more complex, and directors and officers are operating under greater scrutiny from regulators, shareholders and other stakeholders.  

Corporates are also managing geopolitical uncertainty, economic volatility, technological change and a fast-evolving cyber threat landscape. 

“In D&O, the concern is less about the current claims environment and more about the potential severity of future losses,” Poh added. “Regulatory investigations, securities litigation, governance failures and emerging risks can take years to emerge and develop. It is important that pricing continues to reflect the long-tail nature of the product.” 

In cyber, the discussion is more immediate with the ongoing global AI and data centre boom transforming the threat landscape, according to Poh. 

“The threat environment continues to evolve rapidly, and organisations have never been more reliant on technology, data, cloud infrastructure and digital supply chains,” Poh said. “Maintaining the right balance between market competitiveness and long-term sustainability is critical.” 

Concentration risk in cyber is an area that needs closer scrutiny as businesses become more dependent on major technology providers, cloud platforms and interconnected supply chains, meaning a single event can have implications across multiple sectors and geographies. 

“Businesses are increasingly dependent on interconnected technology ecosystems, cloud platforms, managed service providers and third-party vendors,” Poh added. “That creates the potential for broader and more systemic impacts from a single cyber event.” 

Cyber paradox

In the cyber insurance market, there is a growing mismatch between the soft rate environment and the increasingly complex threat landscape, which shows little sign of abating in the short term, according to Poh. 

“There is certainly a tension between the pricing environment and an increasingly complex cyber risk landscape,” she said. 

“The growth of artificial intelligence adds another layer of complexity. AI can help improve security, efficiency and detection capabilities, but it may also increase the speed, scale and sophistication of cyber threats.” 

The cyber insurance market has shown resilience in recent years, supported by improved underwriting standards, stronger risk selection and greater focus on cyber maturity.  

Cyber insurance in APAC has potential for growth given the region’s large cyber protection gap and the rapid evolution of data privacy regimes across the region.  

“We continue to see a significant long-term growth opportunity for cyber insurance across APAC,” Poh added. 

“While the market has developed considerably over the past decade, cyber insurance penetration in many APAC markets remains relatively low compared with more mature markets. That creates meaningful runway for sustainable growth.” 

“While the market has developed considerably over the past decade, cyber insurance penetration in many APAC markets remains relatively low compared with more mature markets. That creates meaningful runway for sustainable growth.” Emily Poh, Sompo

The key drivers include continued digital transformation across industries, expanding regulatory, privacy and disclosure obligations, greater board-level awareness of cyber risk, growth in cloud adoption and AI, and rising expectations from customers, investors and business partners around cyber resilience — alongside growing recognition that cyber risk can create material operational, financial and reputational consequences. 

To capture these opportunities, Sompo has strengthened its financial lines team over the past year. 

“We will continue investing in underwriting expertise across key product lines,” she added.  

“These investments reflect our ambition to be one of the leading financial lines insurers in the region and to provide consistent, high-quality support to our clients and broker partners.” 

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