Cyber Coverage Premiums Increase 25%, Survey Shows

Cyber Coverage Premiums Increase 25%, Survey Shows
The average premium for cyber insurance coverage increased 25.5% during the second quarter of 2021, according to a survey from the Council of Insurance Agents & Brokers (CIAB). This is on top of an increase of 18% in the first quarter of the year.
The increase for cyber insurance was caused by more ransomware attacks, poor risk management protocols and lack of employee training, CIAB reported.
“Carriers continued to approach writing Cyber risk with caution in Q2 2021,” said Ken Crerar, president/CEO of CIAB. “The rapid increase in ransomware attacks highlighted the need for brokers to work with clients to develop and practice robust risk management strategies to confront the growing threat. In a world where costly cyberattacks are becoming the norm rather than the exception, the broker is in a unique position to help clients identify vulnerabilities, find coverage and protect their firms.”
Brokers who took the survey emphasized that adapting to and adopting new technologies to meet the needs of their clients would be crucial to growth in the coming years. This included being more open to employees working remotely from different geographies, demonstrating the shift in attitudes towards remote work. Overall, “Brokers need to remain strong advocates for their clients by telling both the underwriters and the clients the harsh realities of the day,” said one respondent from a large Northeastern firm. “We need to pursue new products that may be more tailored to specific client needs and be ready to create bespoke policies and procedures to respond to these needs.”
Nearly 80% of respondents said there was an increase in cyber claims in Q2 2021, supporting assessments that the rise in claims was one of the main reasons for the rapid increase in cyber premiums.
Despite the increase in prices, 95% of respondents said there was an increase in demand for cyber insurance. CIAB adds that insurers also have started to cut limits and demand customers complete additional risk management protocols.
Source: blog.alta.org