Aon | Financial Services Group
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2022 saw continued flexibility by companies concerning employees working remotely. While this environment is generally a continuing dynamic among companies, the internal controls around smart work reality are relevant for fidelity/crime insurers. Companies should thoughtfully prepare for inquiries from the market about employee dishonesty, computer crime, and social engineering exposures, including questions about VPN usage and general security measures involving employees’ remote computer system access. Details of working arrangements for employees in critical business departments, treasury functions, including fund transfers and securities movements/processing, for example, are also of interest. The ability to show and explain how your company is preparing for potential phishing and social engineering exposures is also important.
The market continues to settle down from a pricing perspective compared to 2021, and we have seen consistency in the underwriting of fidelity/crime programs within the United States, London and Bermuda markets. In 2021 and throughout 2022, most policies that may have had inadvertent cyber-related coverage saw that cover removed from the crime programs, including theft of information, destruction of data, reconstruction costs related to the destruction of data, and extortion cover. The market has seen an increased frequency of social engineering notifications; however, most significant fidelity/crime losses continue to involve employees.
The availability of comprehensive coverage terms remained prevalent in the market for kidnap-ransom programs. Underwriters have significantly limited coverage in Russia and Ukraine. Cyber extortion is now excluded from kidnap-ransom programs. Pricing remains relatively stable but highly dependent upon analyzing the exposure information presented to the underwriters. Exposure to high-risk territories generally leads to an upward premium trend.
We remain optimistic heading into 2023 for the fidelity/crime products within the financial institution and commercial sectors. There will likely be continued market pressure on rates; however, the availability of viable market alternatives should continue to offer clients options.
We are equally optimistic for the kidnap-ransom product, as capacity is substantial and crisis management firms are well-prepared to deal with the ever-changing environment.
Read more about management liability marketplace trends as we head to 2023 here.
Aon is not a law firm or accounting firm and does not provide legal, financial or tax advice. Any commentary provided is based solely on Aon’s experience as insurance practitioners. We recommend that you consult with your own legal, financial and/or tax advisors on any commentary provided by Aon. The information contained in this document and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity.