Most insurance companies are planning significant interest rate increases for errors and omissions and cyber coverage during the first half of the year, says Aon PLC in a report published on Tuesday.
“We expect this to be comparable to the second half of 2021, but expect potential stabilization during the second half of 2022,” according to the 2022 Errors & Omissions and Cyber Market Review report.
The report also said that the broker expects that all insurance companies offering cyber and R&D insurance “will continue to include new reviews, applications and insurance issues in the investment process. It says it expects a focus on war exclusions and”; infrastructure language “in cyber policy .
“Insurance companies continue to face challenges in specific industry verticals,” says the report, particularly in the public sector, healthcare, manufacturing and higher education, and across small to medium-sized businesses.
The report also says that there was a slight decrease in the frequency of cyber claims in 2021, although claims have increased dramatically since 2018, while E&O media liability requirements remained consistent.
However, ransomware activity increased by 323% for the first quarter of 2019 to the fourth quarter of 2021, and eight-digit losses are common, with business interruptions representing the largest component of losses and litigation still to come.
“Interest rates accelerated throughout the year, and we expect this trend to continue as we go deeper into 2022,” according to the report.