FOR IMMEDIATE RELEASE
CYBER PREMIUMS SURGED TO THEIR HIGHEST LEVEL SINCE 9/11 IN Q4 2021, ACCORDING TO THE COUNCIL’S MARKET SURVEY
WASHINGTON, D.C. – Premium prices continued to increase in Q4 2021, according to The Council’s Commercial Property/Casualty Market Index. Prices increased for the 17th consecutive quarter across all account sizes, at 8.7%, up from the average increase of 8.3% recorded in Q2 2021. When segmenting the data by account size, medium accounts had the highest increase out of all account sizes this quarter, at 10.6%, followed closely by large accounts at 9.2%, while prices for small accounts increased the least, at 6.3%.
Cyber once again saw a record increase in premiums in Q4 2021, at 34.3%, the first time since the market fluctuations that followed 9/11 that a line of business recorded an increase of over 30%. Respondents agreed that the frequency and severity of cyberattacks, combined with the inherent difficulty of quantifying and pricing cyber risk, were the primary drivers behind the steep increase. Several brokers also noted that despite these sharp increases, some carriers still weren’t pricing adequately for the exposure they were taking on, suggesting the market remains in an adjustment period.
“Cyber continued to raise alarm bells across the industry,” said Ken A. Crerar, President/CEO of The Council of Insurance Agents & Brokers. “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.”
Underwriting requirements for cyber coverage tightened significantly again this quarter, with carriers increasingly declining to quote or renew policies without proof of multi-factor authentication, endpoint detection and response, and employee phishing training in place. Respondents also reported carriers cutting cyber limits, imposing sub-limits for ransomware, and raising deductibles, even as demand for the coverage remained at an all-time high, with 92% of respondents reporting an increase in demand for Cyber in Q4 2021.
Recruiting and developing talent remained the industry’s top challenge in Q4 2021, cited by 84% of respondents as a top-three priority. “I have heard that 25% of the insurance workforce will be retiring in the next 5 years,” said one respondent from a large Southeastern firm. “That is 5% per year for the next 5 years. Even if you are doing a great job retaining your people, you are still going to have 1-5% attrition per year. That is our most pressing issue, period.” Firms pointed to strategies like summer internship programs, full-time recruiters, and in-person outreach at colleges and universities as ways to address the gap.
Looking ahead, brokers across the country pointed to client education and risk management as key opportunities for growth. “There’s an opportunity to embrace data and analytics to deliver better longer-term strategies,” said one respondent from a large Northwestern firm, while a Midwestern respondent noted that “brokers will need to understand and interpret coverage and policies for clients more now than ever” as the market continues to harden.
Media Contact: Nicole Vasile
Vice President, Marketing & Communications
Survey Contact: Zachary West
Market Intelligence & Insights Associate
