Amid flat or lower cyber prices, brokers see demand for coverage soar

By Erin Ayers on May 21, 2018

The first quarter of 2018 showed either average decreases or flat prices for cyber insurance coverage, according to recent survey from the broker community.

Marsh, in its Global Insurance Market Index, found renewal prices for cyber in the United States to be trending downward in the fourth quarter out of the last five quarters. The average decrease of 1.7 percent comes after 0.6 percent rise in the last quarter of 2017, down from a high of an average 20 percent on renewal in the second quarter of 2015.

“Among the factors driving average prices down are continued increases in capacity and competition as existing insurers expand their offerings and new ones enter the market. At the same time, prices generally continue to increase in sectors most affected by cyber events. As firms increase cybersecurity investments and as the privacy claims environment improves, historic pricing increases observed in 2012 through 2016 are generally unwinding,” Marsh stated.

In the first-quarter survey conducted by the Council of Insurance Agents and Brokers (CIAB), respondents reported some increases in cyber insurance pricing – about 0.4 percent on average.

While the pricing changes were not particularly notable in the CIAB survey, demand for coverage soared in the first quarter, respondents said. Seventy-three percent of respondents reported a “somewhat” or “significant” rise in demand, the greatest increase of any line of coverage.

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eayers@advisen.com'

Erin is an editor at Advisen. She has 15 years of journalism experience. Prior to Advisen, Erin covered property-casualty insurance for 13 years as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at eayers@advisen.com.