Cyber Premiums Stand Out Among Commercial Insurance Price Hikes

Commercial property-casualty insurance premiums increased for the 15th consecutive quarter during the second quarter of 2021, according to The Council of Insurance Agents & Brokers' (CIAB) "Commercial Property/Casualty Market Report Q2 2021."

Respondents to the CIAB survey reported average premium increases of 8.3 percent across all sizes of accounts. Premiums increased for all lines of business for the 5th consecutive quarter, though price increases for all lines moderated in the second quarter compared to previous quarters, the CIAB said.

Cyber insurance stood out as an exception, recording the highest premium increase of all lines at 25.5 percent, surpassing the 17.4 percent increase for umbrella coverage by a large margin.

Survey respondents indicated that a rise in ransomware attacks combined with lackluster risk management protocols and a lack of employee training were primary factors in the increase of cyber insurance premiums, the CIAB said.

Underwriting tightened significantly during the second quarter for troubled lines like cyber and umbrella, the CIAB said. In addition, capacity contracted for both lines, with more than 80 percent of respondents reporting a decrease in cyber insurance capacity and more than 70 percent reporting a decrease in capacity for umbrella.

By account size, large accounts experienced an average premium increase of 9.3 percent during the second quarter compared to 12.9 percent during the year's first 3 months, the CIAB reported. Medium-sized accounts reported a 9.4 percent increase, down from 10.9 percent in the first quarter, while small accounts saw a 6.2 percent increase, down slightly from 6.3 percent during the first quarter.