Buyers of financial institution insurance should expect average rate reductions of 10% across the year, according to a new market outlook for 2025.
The financial institutions insurance market remained stable in 2024, despite economic challenges; and management claims environment and competitive pricing suggest similar conditions in 2025, according to Gallagher Specialty International’s 2025 State of the Market Report.
While insurers may debate price adequacy, competition is expected to keep rates low. More insurers are entering the market, providing increased options at renewal for both primary and excess coverage.
Clients may secure higher coverage limits or reduced self-insured retentions at stable premiums if they have a clean claims history.
Policy wordings are evolving, with enhancements in digital asset coverage, regulatory protection, and crime insurance addressing emerging cyber threats. Insurers are also offering improved global programs, with expanded options in most markets. The availability of multi-year policies is expected to rise, providing premium stability and reducing renewal administration.
In the UK, premium reductions are expected to average 12.5%. Insurers are expanding their appetite for risks, including private equity and digital asset exposure. Some exclusions are narrowing, and insurers are showing flexibility in renewal terms, even for accounts with past claims.
The US market is seeing a 5% reduction in rates, with strong interest from London-based insurers. Coverage for banks and asset managers is expanding, and cyber risk is becoming a more integrated component of financial institution policies.
The Australian market remains competitive, with expected rate reductions of 7.5%. Insurers are maintaining substantial capacity, leading to continued premium decreases.
In Latin America, reductions range from 7.5% to 15% for Directors & Officers liability, while other financial institution products see more modest adjustments.
Market conditions favor buyers, with competitive pricing and improved coverage options. However, future claims trends and external events may influence pricing stability. Clients with complex risk profiles may face challenges in securing discounts but can still benefit from insurer competition and expanded policy offerings.
