After Cyber Insurance experiencing significant fluctuations in insurance costs in recent years, organizations are now witnessing a leveling off in premiums for both Directors & Officers (D&O) and cyber insurance, according to BRP Group, Inc.
BRP Group’s Benchmarking Report
BRP Group, an independent insurance distribution firm, recently released its third annual Directors and Officers (D&O) & Cyber Benchmarking Report. The report serves as a baseline for businesses to measure their insurance costs against industry standards and assess if they have received similar decreases as their peers. It also helps companies compare their retention levels and ensure they have adequate coverage.
Insights from the Report
The report revealed that Nasdaq-listed public companies saw their primary D&O insurance layer decrease by an average of 15.5%, compared to 20.3% for their previous renewal. Additionally, 48% of respondents reported relatively flat renewals, indicating a stabilization in premiums.
For Cyber Liability insurance, 58% of companies reported fairly flat renewals, with premiums remaining within +/- 10 percent of the previous year.
Cyber Insurance Key Findings
One significant finding was the steep decline in average retentions for D&O insurance, with organizations reporting an average retention of $2.1 million in 2023, down from $3.6 million the previous year. Around half of the participating companies saw their overall D&O premiums stay within 10% of last year, with only 19% enjoying rate reductions of over 30%.
Impact on Different Companies
The report highlighted that significant rate changes were mainly observed among companies with market caps between $250 million and $1 billion.
Insights from BRP Group
Mike Tomasulo, Senior Managing Partner and National Management Liability Practice Leader at BRP Group, emphasized the importance of adding meaningful independent data on Cyber Liability Insurance in the report, especially. He noted that providing transparency and benchmarking data for Cyber Liability is crucial for companies to understand and manage their risks effectively.
Looking Ahead
As organizations navigate through changing insurance landscapes, this stabilization in premiums for D&O and cyber insurance could provide some relief. However, it remains essential for businesses to stay vigilant about their coverage needs, especially in the face of evolving risks such as cyber threats and regulatory changes.
Conclusion
The BRP Group’s Benchmarking Report offers valuable insights for businesses to benchmark their insurance costs, retention levels, and coverage against industry standards. By leveraging this data, organizations can make informed decisions about their insurance strategies and ensure they are adequately protected in today’s dynamic risk environment.
