Cyber Insurance Rates not Moderating in Q1
In the first quarter of 2022, global commercial insurance prices rose by around 11%, marking the fifth consecutive quarter with an increase of rates. However, the level of increase in premium has declined slowly and steadily. The five-quarter rate increase has been the longest since 2012, but there still remains one big outlier:
Cyber insurance! THOSE PREMIUMS ARE STILL INCREASING!!
What is cyber liability insurance?
Cyber liability insurance is a protection that covers you from the high cost that can come from different cyber threats. These cyber threats include data breaches, malware infections, ransomware, cyber extortion demand, and more.
Why is cyber liability insurance the major exception?
With the increased number of cyber security attacks, insurers have been extending the plans they offer, providing more protection for their customers. Since they had to add more layers of protection to keep their customers’ businesses safe, the premiums of the plans have also increased around 110% in the United States. This is down from a 130% increase in quarter 4 of 2021.
Global commercial insurance rates have moderated due to professional and financial lines increasing at a slower pace. The global composite rate is being driven by the moderation in the following countries.
“Premium increase” drop from Q4 of 2021 to Q1 of 2022:
United States: 14% to 12%
Europe: 9% to 6%
United Kingdom: 22% to 20%
Asia: 4% to 3%
Pacific: 13% to 10%
The only outliers are Latin America and the Caribbean, which increased from 4% to 6%.
As you can see, while the rate of increase in premium has slowed, there is still a significant increase in premiums paid by the insured!
Why is cyber liability insurance important?
Cyber liability insurance is an important investment for many different reasons. If you store any of your customers’ data online, there is a high risk that hackers could access that data without your permission. If your customers’ data is leaked, it is possible for someone to steal their identity, or even steal money from them. If a situation like this happens, it is then the business owners fault for not protecting themselves, and they will suffer the financial consequences. Small business owners are at an even higher risk for a cyber security breach, as it is usual for them to have less security compared to large businesses. Around one in five small businesses experience a data breach, and 60% of the ones who do must close their business!
On top of the large human casualty from the war in Ukraine, the insurance market is also under added stress. With inflation rising and exposure growth, pricing can be affected. However; overall insurance rates are projected to continue with their moderating trend.
