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Advisen Front Page News - Thursday, February 3, 2022

US cyber pricing skyrockets an average 130% in Q4: Marsh


US cyber pricing skyrockets an average 130% in Q4: Marsh

By Alex Zank and Erin Ayers, Advisen

Cyber insurance pricing again shot up in the fourth quarter of 2021, rising 130% in the U.S., up from an average increase of 96% in Q3, according to Marsh’s Global Insurance Market Index.

Cyber was the exception to largely moderating prices for the quarter. Across all lines, Marsh reported global commercial insurance prices rose 13%, a slowing of the 15% increases in the previous two quarters. Global pricing increases peaked in Q4 2020 at 22%, and remained flat or slowed throughout 2021.

Overall, U.S. insurance pricing for the fourth quarter was up 14%, similar to the third quarter. Property insurance went up 7% in the quarter, down from a 10% price increase in the previous quarter. On property, Marsh said insurers remain intent on tighter terms and conditions and exclusions for communicable diseases and non-physical damage cyber.

Casualty insurance pricing rose 4%, compared to a 7% increase in the third quarter, with auto liability for large fleets increasing by 8% and 2% for smaller accounts.

Pricing in financial and professional lines, which includes cyber insurance, again saw the highest price increases for the quarter. Across the sector, pricing went up 34% year-over-year, up from the 27% price increases seen in the prior quarter. Directors and officers liability pricing for public companies increased an average 6%, down from 10% in the prior quarter. With new capacity coming into the excess D&O space, many clients were able to boost their limits, Marsh noted.

Errors and omissions insurance pricing rose 86%; excluding cyber, E&O increased 22%.

Ongoing increases in the frequency and severity of ransomware claims drove the 130% jump in U.S. cyber pricing, Marsh said in its report. Fourth-quarter cyber insurance rates rose 92% in the United Kingdom, 65% in continental Europe, and 40% in Latin America.

“Business interruption and data exfiltration contributed to the increasing total claim pay-outs from ransomware events,” Marsh said. “Cyber underwriting continued to focus on a company’s control environment and demonstrated cybersecurity maturity.”

While cyber prices rose 130% on average, individual price changes varied. Marsh noted some clients in Latin America saw cyber rates increase by more than 400%. More than 80% of clients across all industries in that region experienced a jump in cyber premiums in 2021.

Journalist Alex Zank can be reached at Managing Editor Erin Ayers can be reached at