Cyber Premiums Rise as Risk Perceptions Increase
A recent study conducted by Marsh, LLC, in partnership with Microsoft, reviews cyber risk perceptions in relation to the quickly evolving technology environment.
Cyber risk has expanded to include complex hacker schemes, which can disrupt business operations and take down complete supply chains, alongside the already well-known data breach risks. As cyber risk grows more complex, organizations are reviewing cyber risk management efforts more vigorously. Out of the 1,500 technology and insurance leaders who participated in the survey, 79% ranked cyber as a top five concern for their organization, up from 62% in 2017. Additionally, 83% have strengthened computer and system security over the past two years.
Of the leaders participating in the survey, 22% think cyber is the number one risk their organization faces, compared to only 6% the year prior. As risk awareness increases, organizations are turning to cyber risk coverage.
With the positive shift towards the need for cyber risk coverage, cyber risk premiums in the surplus lines market are on the rise. Over the last few years, SLTX reported an increase in surplus lines cyber liability coverage, from 3,935 policies and approximately $78 million in cyber premium in 2017 to 5,008 policies with premiums totaling roughly $90 million in 2018. Thus far in 2019, SLTX reports 4,090 cyber liability policies filed with nearly $83 million in premiums, remaining on trend with increases in years past.