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Insurance Company Market Update – Q3 2020

ICPL/E&O and D&O Insurance

By Kevin Kirby | December 3, 2020

A series diving into the current state of the D&O and ICPL insurance marketplace and insurance company industry issues impacting insurance policies.
Financial, Executive and Professional Risks (FINEX)
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We are pleased to present FINEX’s Insurance Company market update for Q3 2020. In this issue, we assess the current state of the Directors & Officers Liability (D&O) and Insurance Company Professional Liability (ICPL) market. Many of the issues addressed in this edition apply to both publicly traded and privately held insurance companies. However, the scope of our insurance market commentary does not extend to public company D&O insurance, as this is addressed separately in our Global FI Market Conditions publication.

As we enter the final quarter of 2020, the insurance market continues to be in a very challenged state. ICPL premiums are generally increasing by 10 – 30% on a primary basis, with certain industry subsets and those risks with less favorable loss history subject to changes of 30% or more as competition is extremely limited. While the pool of excess carriers is not quite as limited, insurers are revisiting price adequacy and seeking to improve upon increased limit factors where possible.

In addition to tremendous scrutiny regarding premium, additional pressure is being applied to both retentions and the breadth of coverage available under ICPL policies. Limited to no flexibility can be expected for exposures such as sales and marketing and cost of insurance litigation, where primary carriers have been emboldened to impose higher or split retentions and restrictive coverage. For the first time, U.S. ICPL insurers have started to address the concept of “silent cyber” through broad exclusionary language, which necessitates a comprehensive review of ICPL and cyber policy wording to identify any potential gaps in coverage.

We expect that both the insurance market and the insurance company industry will continue to face numerous challenges as 2020 comes to a close and a new year begins. We hope this publication, however, offers valuable insights as to how to successfully navigate through these turbulent times. Should you have any questions or would like to discuss any of these issues in greater detail, please reach out to myself or any member of your Willis Towers Watson team.


Table of Contents


  1. 01

    Hard market for insurance companies expected to continue beyond Q3

    Kevin Kirby | December 3, 2020

    ICPL insurance market highlights; including a focus on cost, markets, targeted segments, capacity, coverage, and COVID-19 impact.


  2. 02

    Cyber risk, technology disruption, climate and social inflation among key issues insurers face

    Kevin Kirby | December 3, 2020

    Key concerns and recommendations for insurance companies.


  3. 03

    How insurers can manage the fallout from the COVID-19 crisis

    Kevin Kirby | December 3, 2020

    Key concerns and recommendations for insurance companies based on the potential impact from COVID-19.


  4. 04

    Top 10 least favorable litigation jurisdictions for insurers

    Kevin Kirby | December 3, 2020

    Top 10 least favorable states, cities, counties and courts based on litigation.


Disclaimer

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

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