The management and professional liability insurance marketplace for both existing fund managers and emerging managers has softened significantly over the past 12 months. Both pricing and coverage terms are the most competitive they've been in over a decade with insureds experiencing rate decreases coupled with broadened coverage.
While this is due to a number of factors, the main reason can be attributable to the influx of new insurance companies with a specific interest in the financial services industry. There are currently over 20 (twenty) insurance companies currently underwriting to financial institutions. As such, underwriting capacity and available limits have increased dramatically which in turn has caused a reduction in premium rates.
What are we seeing?
Broader coverage terms and conditions including but not limited to:
Further with the ever-increasing Cyber/Data Security risk facing the alternative asset management community, additional Cyber Insurance Options have come available. Options include a fidelity bond cyber extension, D&O/E&O policy cyber extensions and as well as more competitive and comprehensive stand-alone options from some of the major financial service underwriters.
Absent of any catastrophic events impacting the investment community, we anticipate this trend will continue throughout 2016 and into 2017.