A recent survey of insurance brokers (see here & here) confirms that sales of Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage) are growing and pricing is stable. The survey was conducted by The Council of Insurance Agents and Brokers.
The Cyber Risk Insurance purchase rate is running about 32% of commercial clients, up from 29% in 2016. New buyers are entering the market, and approximately 44% of those renewing increased their level of coverage. Capacity remains adequate and the market is stable. Approximately 85% noted pricing was either flat or down, compared to 60% the prior year.
We have recommended that insureds purchase standalone Cyber Risk Insurance policies, rather than add on endorsements, in order to get comprehensive coverage (see our prior post). The survey notes that approximately 76% purchased standalone Cyber Risk Insurance coverage.
- Organizations of all sizes are becoming more aware of the prevalence of cyber-risks
- Third party contractual obligations have increased
- There is better pricing with more product options
- There is increased capacity in the market
- The risk for cyber-attacks continues to increase in both volume and severity
Almost 63% of large entities cited risk transfer as the key factor in the decision to purchase Cyber Risk Insurance. But for small and medium sized entities, 28.8% were looking satisfy contract requirements, and surprisingly 22.0% for access to post-breach resources.
Many brokers have instituted processes to provide Cyber Risk Insurance to their clients. Approximately 72% said their firm has some sort of proactive, strategic approach to marketing and educating clients and prospects about cyber risk.
Cyber Risk Insurance is an essential coverage for businesses of all sizes for protection from both criminal attacks and employee error; it should not be optional. Coverages vary widely, and a thorough review is essential to ensure that comprehensive coverage is in place.
Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary services to our retail insurance agent clients in the placement of professional liability and specialty insurance (E&O, D&O, EPL, Cyber Risk, Specialty). We excel at hard to place accounts.
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