To paraphrase Charles Dickens in "A Tale of Two Cities," many think that 2017 may be the best of times, while others think it will be the worst of times. And only the passage of time will tell.
But for insurance and finance professionals, a wait-and-see strategy is not likely to be effective; they need to plan ahead.
Although no one has a true crystal ball, New York City-based Marsh has released its annual state of the Financial and Professional (FINPRO) liability insurance market. From cyber risk to the changing regulatory landscape to increasing liability challenges for directors and officers, risks continue to evolve within the financial and professional liability insurance marketplace, the report notes.
Here are the trends that The U.S. Financial and Professional Market in 2017: Our Top 10 List sees as what's in store for the year ahead.
Related: 5 top insurance tech trends for 2017
(Photo: Thinkstock)
|1. D&O rate decreases to continue
Public directors and officers (D&O) liability insurance rates are expected to keep falling in 2017, continuing nine straight quarters of rate decreases. However, as seen in the third quarter of 2016, the rate of decline will likely continue to moderate incrementally.
Although there was a spike in federal filings in 2016, the impact from those claims will take months, if not years, to be reflected in insurance rates.
(Photo: Claims Magazine)
|2. Broader D&O policies
The days of "pure" individual D&O coverage are gone, according to the report. Insurers will likely continue to broaden and differentiate their D&O offerings to remain competitive. Some options include the following:
- Providing or improving entity investigation cost coverage, possibly to include non-formal investigations.
- Adding reinstatement of limits for full coverage.
- Excess insurers reimbursing an insured a percentage of their retention if they're able to successfully obtain an early. securities class action dismissal with prejudice.
- Continuing increases in excess derivative investigative cost sublimits.
Related: What to know about non-ISO regulated coverages for contractors' professional liability
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
