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Cyber Market Remains Competitive, According to Council Survey
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In a firming market, with slight-to-moderate premium pricing increases across the board, cyber coverage remained competitive over the last six months, according to The Council’s most recent Cyber Market Watch Survey. Sixty-three (63) percent of respondents noted premium prices for commercial cyber insurance “stayed the same” over the last six months.
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Additionally, more commercial insurance buyers appeared to purchase cyber coverage in the last six months. Forty-two (42) percent of respondents’ clients purchased some form of cyber coverage, compared to 33% in the fall 2018 report. Of those clients that purchased cyber coverage, 47% of respondents increased their coverage levels. This falls in line with The Council’s Quarterly Property/Casualty Market Report, where 74% of respondents noted an increase in demand for cyber insurance.
More Market Trends
- 42% of respondents’ clients purchased at least some form of cyber coverage
- 23% of those clients who purchased cyber insurance, 23% were first-time buyers
- 47% of respondents’ clients increased their coverage levels within the past six months
- 75% of those with cyber insurance have standalone policies
Pricing Trends
- $2.0 M was the typical cyber insurance policy limit
- 82% of respondents said premium prices either stayed the same or decreased over the last six months
Underwriting
- 53% of respondents did not see any tightening of carrier underwriting practices in the last six months
- 77% of respondents believed there was adequate or somewhat adequate clarity as to what is included and excluded in a cyber policy
- 86% of respondents noted that capacity in the market is either plentiful or increasing
Cybersecurity/Cyber Risk
- 88% of respondents’ firms have a strategic approach to marketing and educating clients about cyber risks
- 38% of respondents’ clients have an information security program in place focused on prevention, detection, containment and response
Another interesting trend from the results was several broker respondents noting interest in utilizing tech-enabled MGAs, such as Coalition, Corvus or EvolveMGA, in order to place small-business cyber coverage. While a number of respondents are already placing cyber through tech-enabled MGAs, others remained with established market players, particularly to place larger risks.
Additionally, “post-breach resources” has started to become a big motivator for the purchase of cyber insurance: 28% of respondents said large entities purchased cyber insurance for that reason, compared to the just 11% of respondents who said the same in the last survey. “They’re [respondents’ clients] starting to see REAL losses and the fallout,” explained one respondent from a large Midwestern firm. However, risk transfer remained, reasonably enough, the overall main reason for the purchase of cyber insurance.