Agency E&O Buyers Report Fewer Price Hikes But Overall Premiums Still Up

November 6, 2023 by

Fewer agencies reported increases in premium on their agency errors and omissions renewal policies from 2022 to 2023, according to Insurance Journal’s annual Agency E&O survey which polls buyers of the coverage on pricing and trends on current market conditions.

Some 63.5% of respondents saw an increase in their agency E&O renewal premium in 2023. That’s down from 70.5% of respondents who saw increases in E&O renewal premiums in 2022, but still higher than the 58.4% who reported increases in premium for the 2021 agency E&O survey.

While premiums may be moderating, the owners and buyers of agency E&O coverage responding to IJ’s survey don’t see the upward trend on pricing coming to an end. The survey found that 66.2% predict another increase at their next renewal. However, that’s slightly down from 68.6% in the 2022 survey but still up from 61.8% in 2021 survey.

Close to half (44.4%) of the agency E&O buyers who responded to the survey said the increase in premium was due to agency growth/expansion/acquisition while another 40.3% of respondents cited the increase came from a rate increase from the agency’s E&O carrier.

Only 6.5% said the increase was due to the agency’s own claims experience while just 3.2% reported the increase was due to changes to underwriting risk factors (other than growth). Some 8.1% noted the increase in premium was due to changes in their policy such as higher limits of coverage; that’s up from 7.4% who reported higher coverage limits as the reason in the 2022 survey.

As the hard market continues, more agencies reported placing business in the excess and surplus lines market. About half of respondents (47.3%) reported placing more E&S business than one year ago when 36.7% reported placing more E&S business.

One area that has continued to change is agency E&O deductibles. Some 52.7% of respondents reported a recent change to policy deductibles. That’s up from 44.6% of agencies that reported changes to deductibles in the 2022 survey.

Company insolvency (13.6%), certain breaches of personal data (12.5%) and pollution and/or mold (6.8%) restrictions, exclusions and/or underwriting changes were other coverage areas that survey respondents noted as recent changes.

Even with added restrictions, a majority of respondents (80.9%) continue to report satisfaction with E&O terms, conditions and limits on their agency E&O policies, which was an increase (71.2%) from satisfaction levels reported in the 2022 survey.

Year-after-year, the vast majority of respondents (83.1%) continue to report that the number one reason they carrier agency E&O coverage is to protect the assets of the agency. Only 9.0% reported increasing their agency E&O limit at the last renewal.

Insurance Journal’s Agency E&O Survey collected about 200 responses from agency owners and agency E&O buyers nationwide via an online survey in September and early October 2023. For more information, contact Andrea Wells at: