7 Global insurance markets: Financial and professional lines pricing declines Financial and professional lines pricing decreased 6% in the quarter — a decline from the Cyber insurance pricing increased 48% in the third quarter, compared to 79% in the second quarter increase of 21%. prior quarter. • Pricing decreased by 9% for directors and o昀케cers (D&O) liability coverage for publicly • The cyber insurance market experienced increased competition; more insurers increased traded companies, driven by new capacity and competition and following a 6% decline in capacity for insureds with strong cybersecurity controls. the second quarter. • Increased competition is due to many factors, including: improved cybersecurity controls, – Carriers were generally willing to increase capacity on towers, eliminating the need to the e昀昀ect of retention level increases and rate adjustments in 2021, reduction in claims have as many insurers on a program. frequency over the past six months despite no change in severity, according to many – In August 2022, 87% of renewals experienced a total program decrease. insurers, and higher interest rates leading to insurers seeking top line growth. – Carriers looked to relationships on other, more challenging coverages — such as cyber • Discussions continued in the industry and in government regarding systemic exposures and the correlated nature of cyber risk. and 昀椀duciary liability — as they sought to win layers on D&O coverage. • Fiduciary markets continued to be challenged by adverse judgements and ERISA 401k plan excessive fee litigation; insurers expressed concern regarding the product’s pricing unpredictability.