2026 MARKET TRENDS
Financial Institutions
Key Takeaways
- Banks continue to face heightened operational risk, with underwriters increasingly focused on the credit cycle, digital strategy and fraud exposures
- Asset managers benefit from competitive pricing, stable retentions and expanding carrier appetite, with growing attention on AI-driven investment risk and cost-of-correction E&O exposure
- Insurance carriers face the most difficulty in ICPL due to nuclear verdicts and natural disaster losses, while D&O, cyber and bond markets remain attractive and competitive
- The cyber market remains stable, though systemic events, evolving privacy laws and increased cyber threat activity, including recent targeting of carriers, remain top concerns
- Market for asset managers, banks and/or fintech companies involved in the crypto/bitcoin space remains limited due to the heightened regulatory scrutiny, financial challenges and volatility
Banks are operating in an environment of elevated operational risk, with underwriters placing increased scrutiny on credit cycle exposure and fraud
Overview
The financial institution insurance marketplace has remained largely stable through 2025 and is expected to continue on a similar trajectory into 2026. Outside of Insurance Company Professional Liability (ICPL), carriers continue to demonstrate consistent appetite across key financial lines, supporting competitive conditions for both new business and renewals.
Banks are operating in an environment of elevated operational risk, with underwriters placing increased scrutiny on credit cycle exposure and fraud. Despite these pressures, pricing has remained largely flat, with only modest increases observed in Bankers' Professional Liability. Asset managers continue to benefit from favorable pricing and stable retentions, driven by expanding carrier appetite across the segment.
Insurance carriers face a more challenging environment for ICPL, largely due to loss trends associated with litigation severity and catastrophe exposure. However, complementary coverage remains competitive and attracts strong underwriting interest. Overall, while concerns persist around technology risk, regulation and cyber threats, the financial space remains stable.
Market Conditions
Underwriters are increasingly focused on credit quality, defaults and broader economic conditions as potential drivers of future loss activity
The growing adoption of AI across financial institutions is influencing underwriting discussions, particularly around investment decision-making, operational controls and E&O exposure
Digital and traditional fraud (i.e., check fraud) and cyber risk remain significant concerns, with carriers monitoring claim activity and systemic event exposure across the sector
ICPL continues to experience reduced capacity and more restrictive terms due to nuclear verdicts and catastrophe-driven losses, distinguishing it from otherwise stable FI lines
Impacts & Considerations
Although the market is stable, coverage-specific challenges and underwriting scrutiny warrant proactive engagement. To support favorable outcomes, financial institutions can consider the following:
Brown & Brown's 2025 Financial Institutions Market Survey Our latest survey looks at the state of the financial lines and cyber markets for financial institutions. Our survey focuses on three subsegments (banks, asset managers and insurance companies) and four product lines (cyber, D&O/management liability, professional liability and bond/crime insurance).
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