A year of stability
As we begin 2025, much has changed, but we think much will stay the same. Despite potential economic and political flux, we expect 2025 to be a year of relative premium stability in the financial and executive lines (FINEX) marketplace.
We started 2024 with an intensifying claims environment in North America. We had two years of over 20% growth in claims volume, coupled with record-high claims payments and recoveries for our clients. By the end of the year and into the start of the new one, claims volume is still up, but at greatly reduced rates, while globally FINEX claims volume is significantly down.
With such high claims volume and severity over a couple of years, there was the potential for capacity to exit the market and cause tightening market conditions. That has not happened. Instead, markets have weathered the storm and rates have flattened.
As such, we believe clients will generally be able to go into renewal discussions with more of a sense of certainty than in the past. This is therefore an optimal time to consider purchasing additional coverages or limits and focusing on the breadth of coverage and claims payment histories and reputations of the carriers you choose for your program.
Of course, there are uncertainties in the new year. We have a new Presidential administration, with priorities that differ from the last administration. We are seeing artificial intelligence generating new claims. We have a very high stock market and very low unemployment rate; if either changes, we could see a flurry of D&O and EPL activity respectively.
For 2025, however, we believe the adequacy of capacity coupled with the past years of premium decreases and claims increases will provide us with a goldilocks environment of relative stability in the FINEX marketplace.
In the articles within, we will walk you through the D&O, cyber, EPL and fiduciary risks and trends in more detail. If you have any questions or want to talk about any of the issues raised in these articles, please feel free to reach out to me or the authors of the articles directly.
01
Our perspective on what to expect in 2025 for the directors and officers (D&O) liability market.
02
A look back at the 2024 cyber liability market and our perspective on what to expect in 2025.
03
A look back at the employment practices liability market and our perspective on what to expect in 2025.
04
Our perspective on what to expect in 2025 for the the fiduciary liability market.
WTW hopes you found the general information provided in this publication 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, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).