Agency E&O Survey: More Agencies See Premiums Rise, Again

According to Insurance Journal’s 2021 Agency E&O survey, 58.4% of respondents saw an increase in their E&O renewal premium from 2020 to 2021, up from 50.2% in last year’s survey. And 61.8% expect another increase at their next renewal; that’s up from 53.8% in last year’s survey.

Almost half (47.3%) of the agency E&O buyers who responded to the survey said the increase in premium was due to a rate increase from the agency’s E&O carrier while another 34.4% of respondents cited the increase came from agency growth/expansion/acquisition. Only 6.9% said the increase was due to the agency’s own claims experience while 5.3% reported the increase was due to changes to underwriting risk factors (other than growth. Just 2.3% noted the increase in premium was due to changes in their policy such as higher limits of coverage.

More agencies are placing business in the excess and surplus lines market than a year ago. More than one-third of respondents (35.2%) reported planning more E&S business than one year ago where just 25.0% reported placing more E&S business in last year’s survey.

One area that has continue to change is agency E&O deductibles. Some 51.1% of respondents reported a recent change to policy deductibles. That’s slightly down from 54.5% of agencies that reported changes to deductibles in the 2020 survey.

Certain breaches of personal data (21.1%), company insolvency exclusions (13.3%) and changes to fraud, dishonest acts, illegal acts, false advertising, discrimination (12.2%) were other areas survey respondents noted as recent areas of change in coverage. However, a majority of respondents (73.0%) continue to report satisfaction with E&O terms, conditions and limits on their agency E&O policies, which was a slight increase (72.3%) from satisfaction levels reported in the 2020 survey.

The vast majority of respondents (85.4%) continue to report that the number one reason they carrier agency E&O coverage is to protect the assets of the agency. Only 10.0% reported increasing their agency E&O limit at the last renewal.

Insurance Journal’s Agency E&O Survey collected more than 200 responses from agency owners nationwide via an online survey in late September and early October. Demotech Inc., Insurance Journal’s research partner, assisted with analysis of this survey. For more information, contact Andrea Wells at: awells@insurancejournal.com.