Category Archives: Media Liability Insurance

Specialty Insurance Year End Wrap-up Webinar 12/12 at 11 AM by Advisen

Please forgive me for a bit of self-promotion, but this program should be really good; I already learned a lot from our panelists’ conference call.

On Thursday morning, December 12 at 11 AM (eastern time), I will be on a panel moderated by Advisen’s David Bradford to review the trends and developments of 2013 in Specialty Lines insurance. The panel of experts will also provide insight into 2014 & beyond. This free, one-hour webinar is sponsored by OneBeacon Professional Insurance; registration is here.

The panel includes:

  • Paul Romano, President, OneBeacon Professional Insurance
  • David Lewison, National Practice Leader, AmWINS
  • Rick Betterley, President, Betterley Risk Consultants
  • David Bradford, President, Research & Editorial division, Advisen (moderator)

The economy continued to improve in 2013, which generally benefitted the insurance market. For specialty insurers, however, the year posed a number of challenges. Healthcare reform continued to reshape the risk landscape of hospitals and other healthcare organizations. Lawyers continued to feel the fallout of the credit crisis and recession as claims activity remained above historical averages. Network security challenges further evolved in the endless cat-and-mouse game between cyber criminals and system security experts.

This webinar will review the trends and developments of 2013 in “Specialty Lines” insurance. Our panel of experts also will provide their insights into the factors that will influence the market in 2014 and beyond.

Hope you can join us!

Private Company Management Liability Markets – WRINTV interview

WRINTV asked me to share our findings about the Private Company Management Liability market and product trends; here is the link to the interview.  It builds off of our August issue (Private Company Management Liability Market Survey 2013).

I continue to be impressed with the depth and breadth of WRIN TV’s content (and not just because I am a source, although I do like the opportunity to share our findings with its audience).  John Greene, Ken Simon, and their colleagues at World Risk and Insurance News have really done something special by creating and nurturing this resource.  Well done.

Intellectual Property and Media Liability Insurance Market Survey 2013 posted – some observations

April is the month in which I release our IP and Media Liability Market Survey, which focuses on the 2 lines that cover the various forms of Intellectual Property.  The free Executive Summary is here.  The full Report can be ordered from IRMI here.

The Report includes a discussion of the RPX RRG for patent infringement as well as adds the Euclid Media Liability product to the carriers we review.

This year I included an interview with Bob Fletcher of Intellectual Property Insurance Services; the interview focuses on the history of the coverage, marketing challenges, and how he sees its future.  Bob is the godfather of IP insurance and I am pleased to include his thoughts.

Your comments and suggestions are welcomed.

 

Intellectual Property insurance interview on WRIN.tv

You can see my most recent thinking on the topic of IP coverage and the market need on WRIN.tv by clicking here.  In case it isn’t obvious, this was a challenging interview, even though it was based on a Report I had just finished.  IP is a complex topic from an insurance standpoint.

Speaking of that Report – it is the April issue (Intellectual Property and Media Liability Insurance Market Survey 2013), which has now been posted at the  IRMI site (scroll down on the IRMI page and click on Intellectual Property and Media Liability link).

As always – feel free to let me know if you have any questions or suggestions.

Snips from our Intellectual Property and Media Liability Market Survey 2012

We have completed our annual review of the insurance markets that offer coverage for Intellectual Property risks and/or Media Liability risks.  The 2 are combined into a single Report because of the significant amount of overlap in the respective coverages.

We have been writing about IP insurance since the mid-1990s, and continue to be enthused about its potential to cover valuable assets and exposures to lawsuits that are not covered elsewhere.  Media Liability was added more recently (2010) as we found fewer markets in the IP segment, but options for coverage could be found in the media products line.

The market has not been as enthusiastic about IP coverage as I am (especially patent infringement coverage), although progress is being made.  Brokers tell me that the reasons for IP coverage not being more widely purchased is a combination of:

  • Lack of knowledge or understanding by the potential insureds and their insurance agents/brokers,
  • Cost (whether real or perceived),
  • Insureds think they already have coverage (in other policies), and
  • Objections from legal counsel, who doesn’t want an insurer involved in the defense

I suspect these reasons are legitimate, and would add “too much work for too few sales” as an explanation of why more Patent Infringement isn’t bought.

Media Liability, on the other hand, is more easily understood and valued (even if the risk is less catastrophic for most), particularly considering the interest in liabilities arising out of social media.  This coverage is now available as an add-on to a wide variety of policies, including Management Liability, Tech E&O, Cyber/Privacy, and others (including BOP-type packages).

Other observations:

  • We have added Liberty International to the IP coverage section
  • Hiscox as well as OneBeacon are now included in the Media Liability section
  • We removed XL from the Media section, as they mostly offer this coverage as an add-on to other products, such as Tech E&O

Next issue (June): Cyber/Privacy Market Survey 2012

Snips from our Private Company Management Liability Insurance Market Survey 2011

We are pleased to let you know that our Private Company Management Liability survey was posted recently at betterley.com.  This Report reviews bundled products that can included D&O, EPLI, Fiduciary Liability, and other executive liability products.  The target market is generally middle market and smaller insureds.

We have selected twenty-three carriers for this year’s Survey, up from twenty in 2010. Newly added carriers include Argo and Zurich; Starr is back after a one year absence.

2011 looks to be similar to 2010, but with a definite firming of rates indicated as the year develops.  While we do not expect any significant increase in rates, discounts are disappearing, and small (5% or so) increases are more common.

The volume of business (gross written premium) is rising a bit, with most carriers reporting total premium growth in the 0-10% range; markets reporting flat or down premiums tend to be the smaller companies, as continuing softness in rates combined with cutbacks in coverage made for an environment in which a carrier was happy just to get as much premium as they did from the expiring policy.  We see support, though, for premiums to resume their climb as insureds recover from the recession.

Based on confidential conversations, we found:

  • Premium growth (2011 projected versus 2010) is rising slightly, accelerating as we get further into the year.
  • Rates are flat or up 5 to 10 percent for good insureds, a bit more (10 to 20 percent?) for the less attractive insureds
  • Deductibles are flat
  • Reinsurance support is stable.

Although carriers continue to broaden the types of coverages they offer the middle market, we believe they are missing a golden opportunity by not offering more coverage options.

Adding more coverage options can be a successful product strategy because MLI policies are an easy sell to insureds and their brokers – most insureds need at least a couple of the core coverages (EPL and Fiduciary).  Adding additional coverages to an existing policy is an easier buy (or sell?) for many insureds, who find it easier to add an option than to buy an entirely new policy.

Many insureds and brokers have told us over the years that they can get internal support for an added coverage option that would have encountered resistance as a new policy purchase.  This was especially true during the recent soft market, when premium reductions freed up budget for additional insurance purchases.

More about lines of coverage soon (or, read the full Report at www.betterley.com).

 

Cyber Risk Insurance Market Survey 2011 – snips from our new Report UPDATED

Cyber Risk Insurance Market Survey 2011 was posted on our site June 30th, just making deadline – and did that ever surprise me, as the Report has grown from an already lengthy 100 pages to 185 pages.  Adding 10 new carriers will do that to you, as will adding a new section on Media Liability coverages.

The increase in the number of new carriers was driven by the land rush of insurers to the new big thing in specialty insurance – privacy coverage (which while not new is getting much more mind share from agents and brokers).  Subscribers were asking about carriers that we weren’t covering which, on investigation, had products worthy of inclusion.

Next year we are going to try to whittle the size back down, probably by unwinding some of the Tech E&O coverages that have found their way into the Cyber report (we cover Tech E&O in a separate report each February).

More later (I said on July 7th); later has finally arrived.

Here are some more snips from our Cyber Report:

Annual premium volume information about the U.S. Cyber Risk market is hard to come by, but in reviewing the market, we have concluded that the annual gross written premium is in the $800 million range (up from $600 million in last year’s Report).  We suspect that the market will continue to grow, as protection against privacy breaches and the growing importance of post-breach response (also known as remediation) services drives the market.

Privacy coverage is clearly driving the market; Cyber Risk seminars and conferences are packed with prospective customers, carriers, brokers, and attorneys interested in privacy risk, coverage, and services.  Interest is translating into purchases, which we (and many others) have been predicting.  Management may still be thinking ‘it can’t happen here’ but as more events occur that would be covered, more Cyber Risk insurance is being bought.

Many carriers are reporting strong growth in premium.  Although we must maintain confidentiality about the details, carriers that have been significant players in the Cyber Risk market for at least several years indicate premium growth ranged from flat to over 100%.  More than one of these carriers reports growth of over 100%, while several others report between 50% and 100%.  A few were in the 10-25% range, and the others were under 10%.  This is remarkable, considering how difficult it has been for commercial property and casualty insurers to grow their top line revenue in the severe economic downturn.

Rates for Cyber Risk insurance, like the traditional commercial insurance lines, are still showing signs of softness.  Some of the smaller carriers report plans to reduce rates on the order of 5-10%, while the larger carriers indicate that rates will stay flat or perhaps down a bit (5%).  Several reported that they expect their competitors will reduce rates even further, a sure sign of a soft market.

  • Note: I am increasingly concerned that the frequency of breaches is higher (perhaps far higher) than anticipated, and that current coverage arrangements may be hard to sustain.  Carriers may react to this frequency by increasing retentions, and worse, restricting limits.  I don’t think that higher rates will be the answer (though we may see those as well).

Intellectual Property and Media Liability – snips from our April Market Survey UPDATED

We posted our IP and Media Liability Market Survey 2011 yesterday at http://www.betterley.com.  The Executive Summary can be found at http://betterley.com/samples.php.

Although there are fewer IP carriers than in previous years, we still find a fair amount of interest in the coverage.

Abatement coverage is offered by both Intellectual Property Insurance Services and Samian.  Defense coverage is more widely available, offered by IPISC, Liberty International Underwriters, Samian, Chartis, and Think Risk.

Media Liability is a hot product, as insureds and their brokers want to learn more about coverage for new (social) media activities.  We covered products from Ace, Allied World, Axis, Beazley, Chartis, Chubb, CNA, Think Risk, and XL.

As mentioned last year, there is overlap (convergence) between IP coverage and Media Liability coverage, an intersection that we find interesting.  Many of the exposures that result from media liability activities are IP exposures, so when an insured is looking for IP coverage, they ought to consider media liability markets (except for patent infringement, which remains in the IP coverage world).

I’ll post about capacity and other meaningful details from our Report when I get a bit more time.

Thoughts About Specialty Insurance for 2011 – Intellectual Property and Media Products

My Intellectual Property and Media Liability Market Survey is still a ways off (April 2011), but I’ve been watching and looking into the lines.

IP insurance still fascinates me, and with the recognition that intellectual property may represent an organization’s most valuable asset, maybe it will fascinate the broader insurance world as well.

We wish that we could forecast that 2011 will be the year that patent insurance comes to the fore, but see no signs of that happening.  The risk is too difficult to measure (though we think there are ways to overcome that), and the capacity needed is too great, for much to be happening here.

But if it does, there is a market opportunity awaiting.  Of course, corporate counsel would still need to be convinced that having an insurance company involved is a good thing.

The more traditional aspects of IP insurance remain alive and well, though we haven’t yet detected much in the way of rate or product trend for 2011.  That sounds like ‘pretty stable’ should be my prediction.

Media Liability coverage is a very busy place, with carriers taking a lot of interest in the subject.  Like privacy insurance, will this be a product that almost all commercial insureds (heck, even personal lines insureds) need?

I’ll go out on a limb and suggest that media liability will be getting as much airplay as privacy issues did in 2010 (and should, as they are heavily intertwined).

An issue, perhaps the biggest one, is lack of awareness of the pervasiveness of the exposure.  Even smaller commercial insureds are aware of privacy risk, but that is far from true for media exposures (where the average insured thinks about old media, not new media, social sites, and the like).

Here’s a prediction – the market will need a lot of education from  fans of media liability insurance for this market to take off.

Snips from Our Private Company Management Liability Market Survey 2010 – additional lines of coverage now available

I released our Private Company Management Liability Report in August; this is a very interesting product that allows insureds to combine multiple coverages into a single purchase.  We see this as advantageous to carriers, brokers, and their insureds.

Interestingly, we are seeing many additional coverages and carriers in this product line.  Carriers are seeking a more cost-effective way to get the numerous newer coverages created over the past decade into the portfolios of their customers.  Insureds agree with this approach, favoring it over the aggravation of renewing multiple policies.  Brokers like it, too, for the same reason (and perhaps also because it makes it a bit easier to defend their client relationship from getting threatened 1 policy at a time).

Here are a few snips from our Report:

  • Carriers are hanging additional coverages on the basic Management Liability insurance (MLI) forms, so we have added several new coverage lines to our tables.  In particular, Cyber Risk and Privacy coverages are beginning to become available on MLI policies, as have Errors and Omissions, Media Liability, and Crisis Response protections. There are important management liability risks that would be a good fit in these policies, including Media liability, privacy violations and Intellectual Property liability.  Carriers are making inroads into including Privacy coverages in these policies, but we don’t hold much hope for meaningful IP coverages.
  • We have selected twenty carriers for this year’s Survey, up from sixteen in 2009. Newly added carriers include Allied World, Fireman’s Fund, Hiscox, RSUI, and U.S. Liability.   C.V. Starr has dropped out of the Survey this year, but expects to be back with a reinvigorated product.
  • 2010 is proving to be another year of deferred rate increases, as carriers are willing to sharpen the pencil to acquire or retain insureds.  Adding to this problem for carriers is that insureds are reducing coverage in order to save premium, sometimes dropping coverages not seen as vital, reducing limits, and increasing retentions.  From the carrier’s perspective, this results in less exposure, but also less premium collected.
  • Finally, carriers seem to have discovered the specialty insurance segment as a good opportunity for growth (we agree).  MLI is a key product in this area, and so it is attracting a steady flow of new capacity.
  • A combination of increased combined ratios, lowered returns (or losses) on insurance company investments, and potential deterioration in D&O and EPL loss experience attributable to a severe recession will eventually point toward higher rates.  Carriers need to charge adequate rates, and insureds can’t keep reducing coverage forever.

Next issue: D&O Side A Liability (October 2010)