| Trend | Range | |
|---|---|---|
| D&O- Primary publicly traded |  |
Flat to –3% |
| D&O-Excess publicly traded | |
Flat to –5% |
| D&O- Private | |
-5% to flat |
| Asset managers D&O/E&O (Excluding private equity firms) | |
–10% to flat |
| Bankers professional liability (BPL) |  |
Flat to +10% |
| Insurance company professional liability (ICPL) | |
Flat to +5% |
Despite the exit of three large financial lines insurers over the past several months, there has been minimal impact on overall state of the financial lines marketplace for financial institutions. Strong competition and ample capacity remain as we begin to move through 2025, but there has certainly been signs of market stabilization. Over the past 12 months, there has been an increase in the total number of class action lawsuits and the cost to defend claims continues to rise. Now that the Trump administration has taken office, we expect to see significant impact relating to the overall regulatory environment, trade policies and tariffs and changes to diversity, equity and inclusion (DE&I) policies just to name a few. The impact of these changes could potentially lead to an increase in claim frequency and severity due to market volatility across multiple lines of business.
Market dynamics vary by each subclass of the financial institutions business:
Asset managers remain the most desirable subsector of the financial institutions industry. Its favorable loss history continues to draw interest from established carriers, as well as new entrants, with many eager to provide excess capacity and competitive terms. This surplus of capacity has enabled premiums to renew flat to down 10% through end of Q1, while also generating potential opportunities for coverage enhancements under most programs. Registered investment advisers, private fund managers and mutual funds continue to be the most desirable class of business for insurance carriers, though firms with challenged risk profiles (e.g., meaningful claims activity) or riskier strategies/products (e.g., cryptocurrency, real estate) should expect added scrutiny during the renewal process. These market conditions are expected to remain favorable through at least the end of Q2.
While market conditions for insurance companies remain more favorable than historical norms, they have deteriorated over the last year with an unfavorable long-term outlook. Loss experience has worsened, resulting in several key carriers citing the recent years of reductions to pricing and retention as being untenable going forward. Carriers are increasingly seeking to leverage participation on insurance company professional liability (ICPL) programs to write more profitable lines of coverage. Additional scrutiny is being applied to claims reporting language as insurers struggle to account for the long tail nature of catastrophic claims. Inflation, natural disasters, geopolitical turmoil and AI are among the leading trends being monitored by insurers
D&O and BPL rates and retentions remained stable during the second half of 2024, and we expect a continuation of that trend through the first half of 2025. There is still an abundance of capacity and significant competition when it comes to D&O for banks while primary BPL continues to remain more limited in the market. Fears of a recession linger and there continues to be uncertainty surrounding inflation and interest rates which will have varying impacts on banks’ loan portfolios. The regulatory scrutiny that has previously plagued the banking industry is expected to ease under the new administration and we have already seen signs of that occurring with Trump’s recent rollback of certain regulations and the dismantling of the Consumer Financial Protection Bureau (CFPB).
To see the full financial institutions - FINEX report, download the report below.
| Title | File Type | File Size |
|---|---|---|
| Insurance Marketplace Realities 2025 Spring Update | 12.7 MB |
WTW hopes you found the general information provided here informative and helpful. 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 advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
