The Middle-market’s Opinion of the Value of an Underwriter’s Knowledge in Cyber/Privacy Insurance

In our recent study of the market for cyber/privacy insurance and services, we asked insureds and prospective insureds about their opinion of the value of a knowledgeable underwriter.  This is an important question in a complex, evolving product like Cyber.

We were surprised, though we probably shouldn’t have been, that the respondents were not all that concerned with the expertise of the underwriter.

Why is this important?  Not only can a knowledgeable underwriter help an insured or a prospective insured understand the risks that are being evaluated, they are also more likely to be a more stable market.  I believe that an expert underwriter who understands the risks is less likely to be surprised when claims arise, as they inevitably do.  A surprised underwriter might react by restricting coverage, dramatically raising rates, or even withdrawing from the market

Naive capacity is not good for insureds, brokers, or insurers.  We’d like to see these middle-market companies place more value on the knowledge of their underwriter, as well as on the knowledge of their broker, when considering cyber insurance.

Here’s the question and the results, as well as more of my comments:Value of Underwriter’s Knowledge

What do you think?

§ Market Penetration and Product Awareness – 9 charts

% of respondents that carry Cyber Risk insurance

Reasons why they don’t buy this insurance

Do they intend to buy it in the next 18 months?

How they learned of Cyber Risk insurance

§ Opinions on Product Features – 27 charts

Opinions about specific product features for both coverage and services

Satisfaction with premium cost

Willingness to pay more premium for key product features

Satisfaction with limits and deductible options

The value of underwriter and broker knowledge

§ Opinions about Cyber Risk Insurers, Brokers, and Service Providers – 7 charts

Which insurers and brokers are insureds and prospective insureds familiar with?

Satisfaction with current insurer?  Broker?

Which service providers are insureds and prospective insureds familiar with?

Number of respondents that have had a claim?  How satisfied are they with claims handling?

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One response to “The Middle-market’s Opinion of the Value of an Underwriter’s Knowledge in Cyber/Privacy Insurance

  1. I will say from a wholesaler’s position, based on numerous submissions each day and brokering Cyber since 1997, underwriter expertise is very important. My position is based on a few facts. Expertise means to me someone who understands the risk(s) and has priced it fairly. I get concerned when I feel underwriter is not underwriting and only taking orders, this is not good for the Insured nor the Insurer, just its not good for me.

    Also, an underwriter who has less expertise takes longer to work through issues AND is rarely open to creative approaches.

    My 2 cents… Happy Holidays

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