CFC Underwriting tops the Insurance Age broker cyber poll

CFC Underwriting is named as the brokers’ favourite cyber insurance provider, taking the top spot, over Travelers and NMU, in a recent survey conducted by Insurance Age among brokers.

The research, part of the Product Hub initiative, and exclusively available to subscribers, highlighted eight providers that brokers said were the best in this highly competitive sector, with average scores between the top three being particularly close.

Making it into this elite eight is a considerable achievement against a backdrop of shrinking capacity, a hardening market and more turning away new business. In 2020, for example, MS Amlin exited the Lloyd’s cyber market, it is understood for profitability reasons, although its MS Amlin SE division continues to provide cover for European and UK e-trade clients.

Meanwhile, more difficult conditions are pitted against rising customer demand for cyber cover. The Allianz Risk Barometer put cyber risks as the biggest concern for companies globally in 2022, in areas such as the threat of ransomware attacks data breaches and major IT outages. In fact, these are of bigger concern that other critical risks like supply chain disruption, natural disasters and the Covid-19 pandemic.

Brokers under pressure
Brokers need to meet strong demand by ensuring they can offer appropriate solutions backed by high levels of service and they are quick to call out insurers who fail to deliver. But, overall, the Insurance Age survey found high levels of satisfaction with cyber insurance providers and a willingness to praise.

Where brokers had issue was in premium rises, which some felt were excessive. These have been around for some time and a report from broker Howden ‘Cyber Insurance: A Hard Reset”, last July, found that premiums had increased by a third over the previous 12 months.

In Insurance Age’s more recent research, one said they had seen premium increases in a particular case of 700%, while others referred to a need to seek more assurances on policy wordings. There was also concern when insurers imposed sudden restrictions or as one said, “in a lack of timing in messaging a reduction of capacity”.

As ever, slow response times cause brokers – and their clients inconvenience – and some also complained that if they were also required to use a wholesaler, this could also mean additional delays.

And, certainly brokers will be keeping an eye on service levels as cyber cover becomes increasingly mainstream. It should be noted, for example, that provider Superscript - which has insurer partnerships with Axa, Beazley, MS Amlin and RSA – is now offering this protection direct to members of Amazon’s Business Prime Programme.

So, in these difficult conditions, which providers in the research have shown they are a cut above the rest?

What the survey covered
Brokers were asked to score cyber insurers on a range of metrics as follows (with combined average score from all companies shown) :

• New business – efficiency in providing quotes (75.21%)
• Quality of underwriting, communication and access to decision makers (76.26%)
• Policy documentation – useability and clarity (78.39%)
• Cover – scope and quality (77.66%)
• Renewals – efficiency and fairness (71.66%)

*The average score was 75.84%

GOLD - Why brokers chose CFC
CFC scored consistently across all categories and did exceptionally well - 93.18% - for its scope and quality of cover, achieving over 10 percentage points more than all the other providers in this category. It was also high scoring in the policy documentation – useability and clarity category, with 87.12% and new business – efficiency in providing quotes with 86.36%.

The multi-award winning business, which is 60% owned by its employees, trades through brokers and has global reach in over 60 countries. Many broker respondents spoke positively about CFC in their comments, including saying it was their “go to” for cyber insurance.

Others expressed their satisfaction by comments such as: “They are the clear market leaders, have a wealth of historic expertise and offer a mass of risk management tools and sales aids.” Another said: “CFC offers the best product and most experienced underwriters”, while further brokers added: “Very good service and excellent policy coverage”, “CFC for cover, extent of territories and premium” and “they are continuously responsive and able to help.”

While there was little in the way of criticism, a few brokers said they had seen an increase in premiums as  one said: “CFC has the best product but they have increased their prices and excesses recently.”

This is largely evident across the whole cyber insurance spectrum, reflecting higher premiums generally. Airmic, for example, has surveyed its members and found more than half said there were higher premium rates, reduced capacity and increased demand for more detailed information on firms’ cyber security at renewal.

SILVER – strong performance from Travelers as runner-up
Certainly when it comes to service and specialism, niche providers often win most plaudits. With this survey, first and third places are taken by CFC and NMU, both of which are MGAs. However, Travelers, which is a major global commercial insurance player, picked up the silver medal, coming in with an average score of 83.0%. The company promotes a “streamlined quoting journey”, in addition to having made a number of product enhancements, and also focuses on supporting brokers who sell cyber to SME clients.

Travelers actually beat CFC in three areas, which were efficiency in providing new business quotes with 87.50% (compared to CFC’s 86.36%), useability and  clarity with 87.5% (CFC scored 87.12%) and in particular, efficiency and fairness at renewal, where 82.50% was achieved, soaring above CFC’s 71.97%.

Travelers was also directly praised by Insurance Age’s broker respondents for offering “comprehensive policy cover and affordability” and another said there was “ease of obtaining quotes and wide cover.”

BRONZE – NMU comes in a creditable third
NMU has gained a solid reputation for ensuring brokers can speak directly to underwriters when they need to, and it is notable that in this survey on cyber, it scored 91.67% in the quality of underwriting, communication and access to decision makers category. This was the second highest score in the survey (beaten only by CFC in the cover – scope and quality category and with 93.18%). NMU also scored highly in the new business – efficiency in providing quotes and the cover – scope and quality categories with 83.33% in each.

NMU supplies CyberSafe, a solution for SMEs via a quote and bind system aiming to simplify the buying process and educate brokers and their clients about cyber risks.

A broker survey respondent commented they liked NMU’s “breadth of cover, pricing and efficiency” and another said the provider “really took its (product and offering) seriously.” A third described NMU’s online system as “user friendly”.

Best of the rest
Hiscox, which experienced a challenging time over its provision of Covid-19-related business interruption cover and during the FCA’s related court case, will no doubt be pleased to achieve fourth place and with an overall average score of 75%. It is understood that Hiscox has adjusted its risk appetite to focus more on businesses with lower revenues in retail and smaller firms as well as reducing exposure in large enterprises.

The insurer, which has direct and broker distribution, scored well in the policy documentation – useability and quality category with 83% and for cover – scope and quality with 81%. Despite this, some brokers also called on Hiscox to improve its service – specifically its speed of response - and as one said: “Hiscox has one of the best policies, but the worst turn around times.”

Meanwhile, QBE came in fifth place and also achieved an average score of 75% - its highest scores were in the new business – efficiency in providing quotes and policy documentation – useability and clarity, with 79.55% in both categories.

With an average score of 72.50%, Markel came in sixth place and scored highest in the policy documentation – useability and clarity category, where it achieved 75%.

Backing for Beazley
Beazley came in seventh place and had an average score of 72.19%, scoring highest in the new business – efficiency in providing quotes category with 75%. A number of brokers spoke up in support of Beazley and these comments included: “Beazley have a very good knowledge of the cyber space and are market leaders” and “(I choose) Beazley, as they are able to accommodate smaller policies with their MyBeazley portal as well as complex risks with their underwriters.” Last year, Beazley said it had taken steps to ensure profitability and had reduced limits in some areas of its cyber book, and seen its count of policies fall even as gross written premium rose.

However, some brokers also noted that Beazley has “added extra questions to their acceptance criteria” and this had resulted in a level of dissatisfaction.

Chubb, with an average score of 70.56%, is in eight place in the survey and the insurer achieved its highest scores of 75.0% both in the quality of underwriting, communication and access to decision makers and policy documentation – useability and clarity, categories. Brokers also praised Chubb for its “depth of knowledge” and “speed and efficiency”.

Coming up on the rails
The research found that a number of other insurers had won praise from brokers, although they failed to make the top eight. These included Aviva for “easy to understand documents” and Brit, for its “willingness to try and find solutions for renewal whereas other insurers have looked to non renew”.

Brokers said they favoured Canopius for its “technical underwriting skills” and CNA for its “fast response and good coverage.”

Chapman & Stacey Underwriting Agency garnered a groundswell of support with comments such as: “They are a slick operation, good prices, clear coverage and instant documents”  and that they were “the easiest to deal with”. A further broker backed Chapman & Stacey and said there was provision of “immediate quotes”, while provider Coalition was singled out for having an “impressive scope of services”.

Meanwhile, Optimum Speciality Risks (OSR) won applause from a number of brokers who said the MGA provided “flexibility of pricing knowledge of underwriters and support in training.” Another said: “OSR are very competitive with their cyber offering and are able to look at a wide scope of different business activities,” while there was also praise for its “platform efficiency”. It was also noted that Pen has “offered the most flexibility in a rapidly hardening market”.

Clients need cyber
Cyber risks only look set to intensify and its accepted now that businesses of every size and description are at risk. Markel - via its direct arm - said recently it had found in a study that some 51% of SMEs and self-employed workers had experienced a cyber security breach. Home and hybrid working patterns could also be seen as exacerbating risks and smaller firms in particular may be uncertain about the best routes to choose in terms of firewalls and anti virus software.

The Insurance Age cyber insurance survey shows that insurers that can continue to offer wide cover, consistent and fair pricing and offer support to their brokers, will be rewarded with loyalty – and in this market that is no mean feat.

Drilling down – results according to survey categories

New business – efficiency in providing quotes

• Travelers – 87.50%
• CFC Underwriting – 86.36%
• NMU – 83.33%
• QBE – 79.55%
• Beazley – 75.00%
• Markel – 72.50%
• Hiscox – 70.00%
• Chubb – 61.11%

Quality of underwriting – communication and access to decision makers

• NMU – 91.67%
• CFC Underwriting – 84.09%
• Travelers – 75%
• QBE – 75%
• Chubb – 75%
• Markel – 72.50%
• Beazley – 71.88%                 
• Hiscox -  71.00%

Policy documentation – useability and clarity

• Travelers – 87.5%
• Hiscox – 83.00%
• NMU - 81.25%
• CFC Underwriting – 81.12%
• QBE – 79.55%
• Markel – 75.00%
• Chubb – 75.00%
• Beazley – 71.88%

Cover – scope and quality

• CFC Underwriting – 93.18%
• NMU – 83.33%
• Travelers – 82.50%
• Hiscox – 81.00%
• Beazley – 71.88%
• Markel – 70.00%
• Chubb – 69.44%
• QBE – 68.18%

Renewals – efficiency and fairness

• Travelers – 82.50%
• NMU – 72.92%
• QBE – 72.73%
• Markel – 72.50%
• Chubb – 72.22%
• CFC Underwriting – 71.97%
• Beazley – 70.31%
• Hiscox – 70.00%

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