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Underwriters' Survey
Good brokers are not mere intermediaries; they are fierce advocates for their clients. Not only that, but they’re also attuned to the pulse of the insurance carrier world. At Woodruff Sawyer, we engage in daily conversations with insurance carriers to gain a deeper understanding of their perspectives.
In our annual survey of cyber insurance carriers, we sought underwriter perspectives on the current risk environment, their risk appetite, and future pricing expectations. We surveyed a diverse range of insurance carriers, from established domestic carriers to Lloyd’s syndicates and startup MGAs. The results offer a glimpse into the minds of underwriters and the cyber insurance landscape for 2025.
Q1
Over the next 12 months, how will cyber risk change?
Q2
What is the most concerning threat companies face?
Q3
Are companies today appropriately aware of the cyber risks they face?
Q4
In your opinion, which risk mitigation strategy needs the most focus from companies over the next 12 months?
Q5
Industry-wide, over the next 12 months, how do you expect cyber insurance premiums to change?
Q6
Industry-wide, over the next 12 months, how do you expect cyber self-insured retentions to change?
Q7
Industry-wide, over the next 12 months, how do you expect cyber coverage to change?
Q8
In the next 12 months, how do you expect cyber coverage to expand?
Q9
In the next 12 months, how do you expect cyber coverage to contract?
Q10
Industry-wide, over the next 12 months, how do you expect underwriting scrutiny to change?
Q1
Over the next 12 months, how will cyber risk change?
While the vast majority of underwriters surveyed believe risk will increase, the data shows they are more optimistic than last year. This is the first year since 2022 that any underwriters predicted risk would stay the same.
Q2
What is the most concerning threat companies face?
Ransomware has consistently ranked as the top issue among underwriters. Concern about supply chain attacks abated last year as privacy violations took precedence. However, supply chain attacks have resurfaced as a major issue due to recent incidents and their widespread impact.
Q3
Are companies today appropriately aware of the cyber risks they face?
Fewer underwriters believe that companies are aware of their cyber risk this year than last year. The decline suggests either cyber risk is growing more than appreciated or businesses might be losing focus on the risk. Either way, staying vigilant as cyber threats continue to evolve is required.
Q4
In your opinion, which risk mitigation strategy needs the most focus from companies over the next 12 months?
While strengthening security and improving processes and procedures continue to be important risk mitigation strategies, underwriters this year are recommending a new method. This is the first year they suggest that companies increase their insurance purchases.
Q5
Industry-wide, over the next 12 months, how do you expect cyber insurance premiums to change?
Underwriters are more divided on premium changes this year, which reflects the reality that cyber insurance claims are high but market capacity remains abundant. This is the first time since 2022 that any respondents said they expect prices to increase greatly—11% did this year in comparison to 62% in 2022.
Q6
Industry-wide, over the next 12 months, how do you expect cyber self-insured retentions to change?
Like prior years, most underwriters expect no change in self-insured retentions. However, those anticipating an increase in SIRs have differing opinions on the extent of the increase. For the first time since 2022, some (11%) are now expecting SIRs to increase greatly.
Q7
Industry-wide, over the next 12 months, how do you expect cyber coverage to change?
The pendulum has completed its swing in the opposite direction, with majority of insurers expecting an expansion of cyber coverage (versus most predicting no change in 2024 and a contraction in 2023). This reflects optimism in the cyber insurance market.
New Coverage Expansion:
Affirmative coverage for AI
Industry-specific coverage
Multi-year policies
Sublimits for SEC notifications
Current Coverage Expanded:
Privacy
Supply chain
Cybercrime
Business interruption
Business Interruption Coverage:
System failure
Dependent business interruption for non-IT vendors
Longer waiting periods
Other Coverage Contractions:
Systemic loss
Privacy wrongful collection
Regulatory coverage
Industry-specific underwriting scrutiny
Q10
Industry-wide, over the next 12 months, how do you expect underwriting scrutiny to change?
The biggest shift this year is that significantly more underwriters expect scrutiny to decrease—26% this year versus 12% last year. However, they expect the decrease to be minimal.