Insurance Market Generally Favorable for Buyers in the Financial Institution Sectors

Market conditions at the end of 2015 were generally favorable for insurance buyers in the financial institution sector and are likely to remain so in 2016, barring unforeseen developments.

Challenges remained in financial and professional liability due to the volatile regulatory landscape and increased attention on cybersecurity. Despite those challenges, which caused financial and professional liability insurers to generally seek rate increases in 2015, competition and capacity were mitigating factors.

Limited catastrophe losses, new capital entrants, and lower treaty costs drove softening of property insurance rates for financial institutions in 2015, a trend expected to continue in 2016, barring unforeseen events.

Overall casualty insurance rates also trended down in 2015 for organizations with good loss profiles. Financial institutions with concentration issues in major cities typically experienced flat rates, or in some cases, rate reductions.

Looking ahead in 2016:

• Cybersecurity. Financial institutions remain a high-risk industry for cyber-attacks.
• Regulatory compliance.  The changing regulatory landscape presents ongoing challenges for financial institutions, with cybersecurity a focal point for regulators.

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