In the “strongest sign of relief” of the past two years for cyber insurance buyers and their brokers, cyber premiums rose by an average of just 3.6% in the second quarter of 2023, according to the Council of Insurance Agents & Brokers’ (CIAB) latest survey.
The 3.6% marks a drop from 8.4% in Q1 and well below the 34.3% seen in Q4 2021. Greater competition from insurers seemed to fuel the price decreases.
“Carriers were competing for the business, and this forced premiums and retentions to decrease and sublimits to decrease,” said one broker from a large Northwestern firm.
Forty percent of survey respondents saw an increase in capacity with only 18% reporting a decrease. By comparison, in the second quarter of 2022, 68% of brokers saw reduced capacity and only 14% saw an increase.
“As with last quarter, respondents did not suggest a particular reason for these shifts,” noted CIAB. “But considering cyber claims, survey results showed that only 22% said there was an increase in cyber claims—down further from 39% last quarter, and down significantly from 72% at the beginning of 2022. Success at mitigating cyber losses could be contributing to renewed interest in underwriting the line and less severe premium increases.”
Digging deeper into Q2 premium changes, most brokers reported seeing accounts renew flat (30%) or with increases ranging from 1% to 9% (28% of respondents). Another 11% saw average decreases of 1% to 9% and 6% saw average decreases between 10% and 19%. Just over 2% even reported average decreases of 20% to 30%.
Nearly 15% saw average price increases of 10% to 19%, with another 6% seeing increases between 20% and 50%. No respondents reported average price increases of more than 50% or decreases of 30% or more.