Loss and Pricing Trends
Loss Trends
Throughout 2021 Aon’s team observed a slight reduction in the frequency of cyber claims, although they have risen dramatically since 2018. E&O and media liability claims remained consistent year-on-year. Severity increased slightly on all fronts, with more material cyber claims in the market than prior years and a slight increase in large E&O and media liability losses.
Source: Risk Based Security, analysis by Aon. Data as of 1/31/2021; Ransomware data exfiltration and downtime per Coveware Quarterly Ransomware Report as of 10/21/2021.
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Key Observations
- Ransomware activity has dramatically outpaced Data Breach/Privacy Event activity.
- Ransomware up 323% from Q1 2019 to Q4 2021.
- Eight figure losses are commonplace – business interruption represents the largest component of loss, litigation still to come.
- Data exfiltration occurred in 83% of ransomware cases per Coveware in Q3 2021.
- Average days of business interruption in Q3 2021 was 22 days, according to Coveware.
Pricing Trends
Aon’s pricing data is real-time and examines year-over-year pricing changes on a monthly or quarterly basis. This analysis aims to highlight major trends; although it is important to note that certain industry and client segments are experiencing far greater disruption to pricing. For example, we’ve observed many clients in the middle market segment that have seen in excess of 250 percent rate increases throughout 2021. Rates accelerated throughout the year, and we expect this trend to continue as we head deeper into 2022.
2021 E&O / Cyber Pricing Primary and First Excess
Average Year-over-Year Change (Same Clients)
2021 E&O / Cyber Pricing All Layers
Average Year-over-Year Change (Same Clients)
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