Insurance Marketplace Realities 2026 – Fiduciary Liability

Rate predictions: Fiduciary Liability

	Trend	Range
Retirement plan assets up to $50 million		-5% to +5%
Retirement plan assets between $50 million and $500 million		Flat to +5%
Retirement plan assets over $500 million		Flat to +5%
Financial institutions		-5% to +5%

Key takeaway

Although some traditional fiduciary carriers continue to be wary, there have emerged enough carriers with increased appetites to create improved and stabilized market conditions. In some cases, D&O insurers are looking to get on the fiduciary towers as well. Premiums have continued to level off, with the most common result being flat renewals and sometimes reduced retentions. If the volume of excessive fee suits picks up, and plaintiffs continue pursuing other newer class action theories, that (combined with the recent U.S. Supreme Court decision in the Cornell University excessive fee case) could create upward pressure on pricing in late 2025 or early 2026.

Slight improvements as more insurers look to build their books

• A recent increase in the number of markets interested in writing primary fiduciary liability policies has been the main driver of modest decreases in premium, though more accounts have been renewing flat.
• Particularly with commercial and large nonprofit (university and hospital) risks, underwriters apply enhanced scrutiny to defined contribution pension plans with assets greater than $250 million, with some carriers avoiding plans larger than $1 billion. Even smaller plans can cause concern because a few smaller plaintiff firms have targeted them, but some carriers are now easing up on retentions for such plans.
• Insurers regularly seek detailed information about fund fees, record keeping costs, investment performance, share class, vendor vetting process and plan governance, causing some insureds to seek assistance from their vendors in filling out applications. Carriers look for: frequent RFPs/ benchmarking, little or no revenue sharing (with caps), little or no retail share classes, few actively managed funds (not QDIA), limited M&A activity.
• Although excessive cost class actions involving health and welfare plans have caused increased scrutiny on such plans, concern is dying down in the wake of dismissals and the lack of new cases being filed.
• Other areas of recent increased carrier inquiry include outdated mortality tables, plan forfeiture policies, tobacco surcharges and pension risk transfers.
• Brokers are having some success in getting credit for positive risk factors, including level of delegation, quality of advisors and favorable venues.
• Some carriers have created specific coverage (often by endorsement) for Pooled Employer Plans, while others have not yet done so.
• Retentions: Insurers continue to be more focused on retentions than on premiums. Although retentions of seven figures remain commonplace for specific exposures (prohibited transactions/excessive fees) and sometimes applicable to all mass/class actions at certain plan asset thresholds, there have been improvements. Some carriers are offering opportunities to “buy down” retentions somewhat.
• Coverage breadth has been seeing some expansions: Other than increasing retentions, carriers have not generally been restricting coverage. Several carriers have become receptive to offering coverage enhancing endorsements. It should be noted; however, that terms can vary substantially.
• Capacity management: Most carriers are closely monitoring the capacity they are putting out, and $5 million primary limits continue to be more common than $10 million.
• Rate prediction qualification: Rate increases may be higher or lower depending on the insured’s existing pricing. We expect to see flat renewals continuing to be common. Price per million of coverage can vary substantially among risk classifications.

Challenged classes

• Healthcare entities, who continue to be targeted disproportionately by class action plaintiffs, continue to see premium increases, although some are renewing closer to flat.
• Financial institutions still receive extra scrutiny, especially if their plans utilize proprietary funds, but their premiums have become stable and even decreased recently.
• Risks to watch: Excessive fee class actions, imprudent fund selection class actions (particularly relating to target date funds), claims challenging use of funds from plan forfeitures, tobacco surcharge, class actions challenging ESG investments, DOL investigations and cyber audits, actuarial equivalence (outdate mortality table) cases, potential claims arising from benefit cutbacks, claims alleging imprudent DB plan buyouts (pension risk transfers).

Download the full fiduciary liability report to the right.

Contacts

---

Lawrence Fine

Management Liability Coverage Leader,
FINEX North America

email Email phone +1 212 309 3623

---

John M. Orr

D&O Liability Product Leader,
FINEX North America

email Email

---