A new market survey by the Council of Insurance Agents & Brokers (CIAB) has shown that premium prices climbed further in Q4 2021, marking the 17th consecutive quarter of premium increases.
The average increase in premiums across all account sizes was 8.7%, down slightly from the 8.9% recorded in Q3 2021.
Respondents reported an average premium increase of 34.3% for Cyber, the first time the line has seen an increase of this magnitude since 9/11.
Premiums also continued to increase for the other commercial lines, including Umbrella and Commercial Property, both lines for which respondents reported an average increase in premiums above 10%.
Ken Crerar, President/CEO of The Council of Insurance Agents & Brokers commented: “Cyber continued to raise alarm bells across the industry.
“The increase in premiums for that line continued unabated in Q4 2021, and the frequency and severity of Cyber claims continued to climb. The industry must take steps to confront this unique, constantly evolving risk.”
Carriers seemed to be taking those steps when it came to underwriting cyber risks.
A common refrain among respondents was that carriers would outright refuse to provide quotes or terms if the insured could not show they had multi-factor authentication in place, and very often respondents would report carriers asking for significantly more than that.
Things like endpoint detection and response, privilege access management, staff training, and others were all key requirements from carriers, according to respondents.
Beyond that, in order to further incentivise insureds to adopt stronger risk management practices, carriers would, according one respondent from a large Midwestern firm, “offer self-service risk mitigation programs like best practices, sample procedures, trainings and videos.
“Many carriers also offered consultations with cyber vendors or cyber experts. Many offered discounted software solutions and some offered reimbursement for certain pre-approved vendor payments.”
Relatedly, client education and risk management were two areas many brokers believed firms could find opportunities to grow and expand.
One respondent from a large Southeastern firm commented: “We need to become trusted advisors rather than insurance salespeople.
“So much of what we are doing now requires true risk management in addition to providing quality insurance programs,” said another respondent from a large Northwestern firm.
“Employers need guidance in every facet of the business. Brokers can be a great business partner that provides that guidance and direction.”
