So we just finished reading a very deep dive by Rand called “Content Analysis of Cyber Insurance Policies: How do carriers write policies and price cyber risk?” The depth of the analysis is significant including discussion of pricing “boxes”, increased limits factors, and security factor weighting. When all was said and done, our favorite excerpts include:
- “Only in a few cases were carriers confident in their own experience to develop pricing models”
- “We are not using claims counts as the basis for credibility because we have not experienced any claims over the past three years..”
- “Further, it is not unforeseen for carriers to examine their competitors in order to define rates”
- ..”in some cases, the carrier would appear to guess..”
Guess we don’t know what we don’t know eh? It’s a “last look market”…damn the sexy marketing slicks!