Marsh’s top 10 financial &
professional market trends
By Rosalie L. Donlon, PropertyCasualty360.com
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. Fi-
1. D&O rate decreases to
nancial and Professional Market in 2017:
Our Top 10 List sees as what’s in store for
the year ahead.
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
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.
2. Broader D&O policies
The days of “pure” individual D&O cov-
erage are gone, according to the report.
Insurers will likely continue to broaden
and differentiate their D&O offerings to
remain competitive. Some options in-
clude the following:
• Providing or improving entity inves-
tigation cost coverage, possibly to
include non-formal investigations.
• Adding reinstatement of limits for
• 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.
3. Changing securities
Securities regulations and resulting enforcement and claims will likely change
under President Donald Trump’s administration and a Republican-controlled
Congress. According to the report, some
type of deregulation for financial institutions and other organizations is likely.
This could come in the form of fewer
corporate penalties while continuing to
hold culpable individuals accountable.
It’s also likely that the U.S. Securities
and Exchange Commission (SEC) whis-tleblower program will continue in some
form — possibly requiring whistleblowers to first report purported wrongful
Although deregulation may ease the
regulatory burden on businesses in an
effort to stimulate growth, it could lead
to a rise in resulting claims due to a
potential decrease in transparency and
mandated corporate guidelines.
4. Activism on the rise
Shareholder activism has become one of
the most important issues confronting
corporate officials. Shareholder activism
in the U.S. and abroad is increasing as
shareholders continue to influence cor-
porate conduct and decision making.
However, activism is not just limited