NEWS RELEASE – FOR IMMEDIATE RELEASE
Contact: Brianne Spellane
Director of Communications & Content Strategy
Take-up Rates Increase, Market Continues to Soften,
According to CIAB’s Cyber Market Watch Survey
WASHINGTON, D.C. – May 18, 2017 – When it comes to purchasing cyber insurance, clients are beginning to ask the right questions as they become more familiar with the risk, according to The Council of Insurance Agents & Brokers’ Cyber Insurance Market Watch Survey. Released today, results also indicated a steady increase in take-up rates among clients and prices continue to stabilize.
“As brokers become more experienced with cyber exposures, they are growing their knowledge of this new breed of risk,” said Ken A. Crerar, president and chief executive officer of The Council. “This is a good sign, as brokers play an increasingly crucial role in both cyber risk mitigation and post-event response. The globally-launched WannaCry/WannaCrypt ransomware file encryption exploit is a prime example. Brokers are actively advising clients on the preventative steps to take now to increase the chance of escaping the virus, which has infected hundreds of thousands of systems.”
Roughly 32 percent of respondents’ clients purchased some form of cyber liability and/or data breach coverage in the last six months, compared to 29 percent in October 2016. This increase follows a slow but steady trend, which can be contributed to several reasons: 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; and the risk for cyber-attacks continues to increase in both volume and severity.
Of policyholders who purchased cyber coverage in the last six months, 44 percent increased their coverage levels while 56 maintained their existing level of coverage. One respondent explained, “most clients that are renewing coverage are actively exploring increased limits, or at least assessing if their current limits are adequate.”
The last six months also saw trend changes in premium pricing, as 85 percent of respondents noted that premium pricing generally stayed the same or decreased. Just a year ago, nearly 40 percent of respondents reported an increase in premium pricing, proving that policies are becoming more affordable.
The Council developed and launched its first Cyber Insurance Market Watch Survey in October 2015 in an effort to gather a baseline reading of the cyber insurance market. It continues to monitor the market as it develops. The Cyber Market Watch Survey is conducted biannually.
To see the full results, click here.