Once considered a sleepy coverage line, fidelity insurance has since emerged as a loss driver, grabbing the attention of clients both big and small, operating across all industry segments.
In 2025, pricing remained stable with competitive rates. From a loss perspective, we continued to see an uptick in social engineering and business email compromise (BEC) while also commonly seeing theft and deception take on a variety of other forms. Severity is rising in pockets, and we anticipate this trend will continue into 2026. As fidelity losses work their way through the claims process, we anticipate carriers will begin reassessing price appropriateness, limit deployment and deductible adequacy on an account-by-account basis. Given the named peril structure of fidelity bonds, clients eagerly look to understand how their policies will respond in an ever-evolving fraud landscape.
Social engineering and BEC remains a top dollar‑loss category. In fact, they accounted for about $2.8 billion in 2024, according to IC3 reporting. Over the last decade, global exposed losses have hit $55 billion. AI is adding a whole new layer of complexity. Voice cloning and hyper-realistic deepfakes are making it harder than ever to identify what is fraudulent from what is legitimate. It is no surprise that AI risk is top of mind for underwriters as we head into 2026.
WTW’s proprietary claims data suggest that external theft and fraud (including but not limited to social engineering/BEC) has overtaken internal theft and fraud both in terms of frequency and cost. This is a significant development as internal theft and fraud historically drove fidelity losses from a cost perspective. Losses from internal sources can take more than seven times as long to discover, given employees have the inside knowledge to avoid detection. All of that to say, internal theft and fraud will continue to contribute to fidelity losses in terms of both “low level” fiddling of expenses to elaborate frauds that require extensive planning.
The FBI and USPIC issued a warning in early 2025 that check fraud was on the rise, with a significant volume enabled through mail theft. Fraudsters take advantage of regulations requiring financial institutions to make check funds available within specified time frames, which are often too short a window for the consumer or financial institutions to identify and stop the fraud. As a result, the fraudulent check clears and the funds are withdrawn by the criminal before the fraud is detected. Check fraud was among the primary drivers of fraud events in 2024 despite declining check volumes, according to the annual Federal Reserve Financial Services Financial Institution Risk Officer Survey, published in 2024. This too is a trend we expect will continue, until a time in which all financial institutions’ employees, customers and external partners have been armed with proactive education and knowledge about check fraud to help prevent, detect and mitigate it.
Lastly, let’s not forget about social media and the effects it has on our society today. Viral videos that teach people how to exploit vulnerabilities have fueled massive fraud schemes, costing billions of dollars. The digital battle against fraud will continue to intensify in 2026. As we look toward the future, it is imperative to adopt an agile, technology-driven approach capable of evolving as rapidly as the increasingly sophisticated schemes employed by scammers.
Despite the claims landscape, we don’t expect the fidelity market to take a broad-brush approach on rate and therefore suggest flat average rate expectations for FI bond and commercial crime into 2026, contingent on claims history and exposures.
Primary U.S. capacity is plentiful for mid-sized risks but more limited for large and complex risks or those with unique exposures. London capacity has reemerged for commercial risks and remains ample for FI risks. Insureds should anticipate higher deductibles and premiums in the London market, commensurate with broader terms and conditions. Excess social engineering only limits are available at competitive rates and are being pursued by a growing number of clients.
Competition is strongest for mature, well-controlled risks, with centralized operations predominantly in the United States. We continue to see growing carrier interest in writing the fidelity when also writing primary management and professional liability.
Terms will be an area to monitor in 2026. We anticipate that terms may tighten on risks with loss activity, weak verification controls and heavy funds transfer exposure. Clients should expect additional underwriting scrutiny and potential deductible discipline. Social Engineering will remain sub limited ($250,000 to $1 million) with many policies requiring strict conditions (callbacks/authorization attempts).
Underwriting focus will intensify on procedural controls (callbacks/dual authorization), treasury operations, third-party processors and cross-policy aggregation (Crime ↔ Cyber).
From a governance perspective, the National Automated Clearing House Association’s (Nacha) 2026 rule changes strengthen ACH fraud monitoring, requiring risk-based controls for originators and RDFIs to enhance payment security. Nacha’s latest risk management amendments emphasize the collective responsibility across ACH participants to proactively detect, prevent and respond to fraud activity. These changes should effectively protect consumers and financial institutions from fraud, ensuring that payments are processed reliably and securely.
The passage of Executive Order 14178 and the GENIUS Act aim to create a "Golden Age of Crypto" in the U.S. by providing regulatory certainty, promoting innovation, protecting consumers and ensuring the U.S. dollar remains central in a new digital financial world. The lack of a regulatory framework has kept both clients and underwriters on the sidelines. For the insurance industry, this clarity creates the conditions for broader market participation, innovative product development and competitive capacity. We expect the enhanced clarity will reduce insurer hesitation, enabling tailored coverage for digital asset theft or fraud.
Although previously considered a sleepy line of coverage, the emergence in losses and evolution of sophisticated fraud schemes has since awoken the focus on fidelity insurance. Expect a competitive FI bond and commercial crime market with ample capacity and flat pricing for insureds demonstrating exemplary controls, especially around social engineering verification, third-party payment flows and AI governance tools. Loss activity tied to BEC, mail/check fraud and AI‑enabled impersonation will keep coverage largely sub limited and procedural conditions tight, but buyers who can prove strong control efficacy will benefit from broader terms.
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).
