More than a third of technology companies have switched or are considering switching primary insurers this year in response to rate hikes and capacity cuts, Marsh LLC said in a report Wednesday.
About 54% of tech companies are increasing retentions and 38% are reducing limits, Marsh said.
Technology companies are looking to take more control of their risks amid the economic downturn, with 34% of the more than 300 CIOs surveyed saying they are looking at alternative risk solutions.
About 22% of them are considering captives and 18% are moving toward pure catastrophic coverage, Marsh said.
In seven key tech company coverages tracked by Marsh, only workers’ compensation premiums are lower in 2022 than they were in 2012.
Cyber premiums have more than quadrupled for tech companies since 2012, and while D&O rates are starting to fall, property prices have risen over the past two years, Marsh said.
Persistent premium increases over the past decade have pushed many tech companies to take more aggressive steps to preserve capital and protect their operations, the survey found.
About 38% of risk managers said they would or might switch primary insurers, compared to 25% last year and 24% in the 2021 survey when the average rate increase was in double digits.
The survey results were based on responses from more than 300 risk managers at technology companies in 29 countries.