Broker Check

Cyber Insurance Trends - Higher Losses, Lower Limits

November 24, 2021

While rate increases are moderating for most lines of insurance, premiums for cyber insurance continue to increase driven by heavy losses. As reported by Reuters, insurers in the United States and Europe and syndicates at Lloyd's are all raising prices while cutting limits in half.

Ransomware payments were $416 million in 2020, but rose to $590 million in the first six months of 2021. Insurers' combined ratio of 95.4% for cyber in 2020 was 20 points worse than 2019.

Faced with these losses, insurers are not only raising prices but cutting back on limits - from $10 million to $5 million or $5 million to $1-3 million. Premiums for cyber insurance have almost doubled and for some policies risen by 300%.

What can insureds do? The best advice is stronger cybersecurity to convince insurers that you're a good risk.