Cyber Insurance Coverage Levels On The Rise
By: Judy Greenwald, Business Insurance, October 2016
Nearly 40% of policyholders who have purchased cyber insurance over the past six months have increased their coverage levels, according to a survey by the Council of Insurance Agents & Brokers issued Wednesday.
Meanwhile, the average takeup rate for cyber insurance increased to about 29%, compared with the 25% reported in the Washington-based council’s semiannual April 2016 survey.
“This increase follows a slow but steady trend, suggesting that cyber awareness and interest in cyber coverage is on the rise,” says the executive summary of the survey, “Cyber Insurance Market Watch Survey.”
The average policy limit is around $3 million, the same level reported in the April survey. However, 72% of respondents said premium rates for cyber policies generally remained the same, compared to only 48% in the April survey. This suggests underwriting and pricing is beginning to stabilize, said the summary.
A total of 55% of respondents said there is not enough clarity from insurers as to what is covered and excluded in their cyber policies. “Many respondents noted coverage is still being written via manuscript polices, leading to different terminology from carrier to carrier,” said the summary.
The survey found also that only 37% of respondents’ clients have a proactive information security program in place with capabilities in the four key areas of prevention, detection, containment and response/eradication.
This compares with 35% in April, “suggesting that progress is slow as entities struggle to stitch tight budgets to adopt cyber defenses,” says the summary.
The findings are based on 88 respondents from 66 firms. The survey was completed Sept. 27.
