Rate predictions
| Trend | Range | |
|---|---|---|
 |
+5% to +10% |
Key takeaway
What used to be a benign line of coverage continues to evolve with unique and sophisticated hacking and trickery schemes, though employee dishonesty claims remain the number one driver of crime losses.
Insurers are focused on eliminating coverage that may also be addressed in cyber policies.
- Fidelity/crime underwriters are eliminating destruction of data clauses and relying on equivalent coverage available under cyber policies.
- The few carriers that still provide kidnap and ransom (K&R) and extortion coverage under their FI bonds are determining whether to maintain the coverage, while some have dropped it, arguing that the cyber and/or K&R markets should step in.
- Cyber underwriters are often removing previously afforded crime coverages, including social engineering fraud, suggesting that the crime policy may be better suited to respond.
New exclusions and coverage restrictions are emerging as a result of court decisions, evolving technology and loss trends.
- As courts continue to interpret crime policies in ways that were perhaps not originally intended, insurers have been quick to respond with clarifying endorsements restricting coverage.
- Explicit cryptocurrency and non-fungible token exclusions have started to appear in policies.
- One leading market has recently added a ransomware exclusion, making it clear that the crime policy will not cover ransomware losses. We expect other markets will follow suit.
Social engineering fraud remains a top focus for underwriters.
- Select insurers are pulling back on social engineering limits previously afforded.
- Underwriting diligence remains a top priority, with an emphasis on call-back verification procedures.
- Loss data continues to show that social engineering fraud is generally more of a nuisance/frequency concern than a severity concern.
