Agency E&O Survey: More See Premiums on the Rise

According to Insurance Journal’s 2020 Agency E&O survey, slightly more than half of all respondents (50.2%) saw an increase in their E&O renewal premium from 2019 to 2020, and 53.8% expect another increase at their next renewal.

In the West region, 61.8% of survey respondents reported higher agency E&O premiums while only 38.5% said their agency’s E&O premiums rose in the East.

For more than one-third of respondents (34.1%), the increase in premium was due to a rate hike from the agency’s E&O carrier while another 35.7% of respondents said it came from agency growth/expansion/acquisition. Only 7.7% said the increase was due to the agency’s own claims experience and 10.4% noted the rise in premium was due to changes in their policy such as higher limits of coverage.

One area that has continued to change is agency E&O deductibles. Some 54.5% of respondents reported a recent change to policy deductibles. That’s up from 44.5% of agencies that reported changes in the 2019 survey.

Company insolvency exclusions (14.9%) and changes to fraud, dishonest acts, illegal acts, false advertising, discrimination (11.9%) were other areas survey respondents noted as recent areas of change in coverage. A majority of respondents (72.2%) reported satisfaction with E&O terms, conditions and limits on their agency E&O policies, which was a slight decline from the 79.4% satisfaction level in 2019.

Insurance Journal’s Agency E&O Survey collected more than 300 responses from agency owners nationwide via an online survey in late September and early October 2020. Demotech Inc., Insurance Journal’s official research partner, assisted with analysis of the survey results. For more information, contact Andrea Wells at: awells@insurancejournal.com.