The insurance market for financial institutions for 2026 is favourable, buyer friendly and with an excess of capacity. This will continue the trend from 2025 where we saw an average premium discount of just shy of 10%, with more than two thirds of our clients reducing their premium spend. Terms have broadened, and the ease and speed of placing coverage has increased. In the following briefing we detail conditions by sector and geography. At a macro level though:
- We expect rate reductions to tail off slightly compared to last year and anticipate an average discount of -7.5%
- Loss free, well received businesses should be able to secure better than average terms
- This may be the beginning of the market entering a prolonged period of commercially attractive but stable rates
- Insurance company mergers may increase but any negative draw on capacity will likely be offset by new entrants
- We expect a continuance of multi-year placements with premium locked in for an agreed period
- Digital asset exposures are likely to be accepted more freely by insurers effectively becoming premium neutral
- The ability of insurers to write global programmes is likely to continue, further increasing competition for globally exposed insureds
United Kingdom
Banks/Lenders and FinTech
We expect average rate reductions of 10% by 2026, driven by increased competition among insurers.
Retentions for Professional Indemnity (PI), Directors & Officers (D&O), and Crime policies are stable
- Large banks and FinTechs are expected to grow their digital asset exposure. Insurers are matching up to this exposure well and many now cover the additional exposure on a premium neutral basis
- The FCA continues to tighten regulations around operational resilience, financial crime prevention, and consumer protection. This includes a strong focus on tackling Authorised Push Payment (APP) fraud. Gallagher has successfully placed bespoke cover for APP fraud, providing financial institutions with tailored protection against this growing risk
- As expected, the insurance impact from car finance ‘mis-selling’ has been limited to those entities directly exposed
Investment Management
We are anticipating an average rate reduction for 2026 in the range of 7.5% across the market on a risk-adjusted basis, which whilst tailing off versus prior years, continues to reflect competitive pressures and evolving risk appetite across carriers.
Regulatory Environment: there is, and has been, a shift with firms needing to prepare for the following developments:
- SEC Inspections: in-person visits are becoming increasingly common, signalling heightened scrutiny on the UK from the US regulator and the need for robust compliance frameworks.
- AIFMD II: implementation scheduled for April 2026, meaning this update will need proactive planning to ensure adherence to new requirements.
Industry Observations: several sector-specific trends are emerging in the insurance space for UK asset managers, with the following being two (of many) topics of conversation:
Employment Practices Liability (EPL): The frequency and severity of claims remain an area of concern, with an increasing number of cases and litigation influencing underwriting approaches.
- Long-Term Agreements (LTAs): as the market cycle inevitably turns, renewals and pricing strategies are under review as both brokers and carriers seek sustainability and certainty where possible.
Private Equity Specifics:
The continued softening of the Commercial D&O market has ensured that Private Equity businesses that seek to buy packaged placements for their portfolio companies are seeing significant rate reductions
- Rates for run-off are under increased downward pressure as insurers now seek to compete for this niche class
Digital Assets
We expect average rate reductions of 10%, as insurers gain a better understanding of blockchain technology and associated risks, leading to more competitive pricing.
Key Observations:
- The UK government is advancing legislation to regulate digital assets, including stablecoins and crypto exchanges. These regulatory changes aim to provide greater clarity and stability for the market, encouraging insurers to develop D&O and Crime policies that align with compliance requirements and effectively mitigate risks.
- The introduction of the GENIUS Act in the US and MICA in the EU has further driven the push towards digital assets and mainstream adoption of the use of stablecoins in global finance. This asset class requires adequate protection through bespoke, broker-driven products.
- Monitoring the effect of the FCA’s discussion paper (DP25/1) and the two follow up consultation papers (CP25/14 and CP25/15) will be crucial to see how the UK’s regulatory framework for digital assets match/mirror MICA and the GENIUS Act will. This includes the scope of what the FCA considers a Cryptoasset Trading Platform (CATP) and how it intends to monitor and regulate these entities going forward.
Wealth Management
We expect premium reductions of 7.5% will be available, especially where competition can be introduced at renewal.
- Despite prominent regulatory investigations into how Conflicts of Interest issues are being managed, and FCA interest around fairness and size of fees premium reductions are still readily available to many Wealth Managers
- Supply of insurance capacity continues to exceed demand driven by several insurers re-entering this space
- In our experience Wealth Managers do not purchase large limits of indemnity, especially when compared to Fund Managers and PE firms, and we do not see any material change here. Nor do we see any changes to current retention rates.
International Markets
Central and Eastern Europe
We expect average rate reductions of 10% in 2026.
- London Reinsurers are increasingly demonstrating flexibility in complying with local regulatory requirements enabling them to compete with local markets more effectively
- Rising M&A activity in the commercial banking sector is creating new opportunities for innovative insurance solutions and expanded coverage
- London Reinsurers are actively pursuing growth by increasing capacity deployments
- The rise in technology-related losses, particularly those involving social engineering, highlights the importance of specialised knowledge and innovative coverage London Reinsurers can offer.
United States
We expect premiums to be flat in 2026.
- The London insurance market continues to have a broad appetite for US Financial Institution (FI) risks, with a lot of capacity available
- Insurers are writing more accounts of broker-drafted policy wordings, with agreements on asset management, bank and fintech products, which has seen more business move to the London market
- There has been an uptick in claims, particularly social engineering fraud, and professional liability (because of broadened coverage)
- As rates on non-US business have reduced severely, underwriters are turning more towards US FI accounts, which we see continuing into 2026.
Middle East & Africa
We expect average rate reductions of 10% in 2026.
- London continues to assert its position as the leading global hub for large and complex risks, backed by unmatched expertise, substantial capacity, and a long-standing reputation for excellence.
- London and regional Reinsurers are proactively offering expanded limit options at competitive rates.
- London and local Reinsurers are still offering rate reductions; however, this is accompanied by increasing market commentary suggesting that pricing may be nearing the “bottom”.
- London Reinsurers are offering broader wordings and enhanced terms in response to heightened premium reduction pressures and intensifying global competition.
- The introduction of new Saudi regulations mandating 30% local placement for Saudi-based risks is driving competition in the local and London market.
Canada
We expect average rate reductions of 5% in 2026.
- The London insurance market continues to have a broad appetite for Canadian FI risks
- There is a lot of capacity available across almost all sectors especially when the exposure is 100% Canadian. Sometimes Canadian risks get tarnished with a US brush particularly in the life insurance space given bad faith claims etc.
- Insurers are willing to write more frequently off our own broker forms with next to no amendments meaning greater amounts of business moving to the London market
- Canada is a key player in the digital asset/crypto space and they are starting to use the London market to place this business given the capabilities that we have here.
Australia
We expect average rate reductions of 5% in 2026.
- London insurers remain firmly committed to Australia with an increase of capacity available to Australian insureds through new entrants into the London marketplace.
- Regulatory headwinds from ASIC are expected to continue into the new year. ASIC continues to issue Interim Stop Orders under the Design and Distribution Obligation (DDO) regime with a focus on DDO compliance expected to continue into 2026-27. ASIC are also issuing notices on a range of regulatory issues because of cyber incidents / privacy breaches (in line with breach notification obligations), advisor emails being compromised and cyber infiltration into clients’ accounts resulting in withdrawals. In the last 12 months, ASIC have doubled their number of new investigations with many Section 19 and Section 30/33 notices being issued to Directors. An uptick of claims has also been seen in relation to investment advice and conduct under s945a & s917 of the Australian Corporations Act 2001.
- London insurers continue to write on broad bespoke wordings with many offering increased coverages for areas such as fines and penalties, where insurable by law, and social engineering.
- The London marketplace remains open to place challenging and complex risks and have successfully seen claims pay out across a range of emerging areas such as digital assets and cryptocurrency losses. Insurers have warmed to writing more of these risks as they become regulated in Australia.
Latin America
We expect average rate reductions of 5% to flat in 2026.
- Rate softening is expected to continue into 2026, though at a slower pace than the past 18 months, as pricing in some cases has already reached historical lows
- London and global (re)insurers maintain strong appetite for Latin American risks, driven by the region’s growth potential and the need for geographic diversification
- A crowded and highly competitive marketplace is pushing carriers and brokers to differentiate through broader wordings, enhanced terms, and flexible structures rather than further aggressive rate cuts
- Emerging exposures, such as cyber-enabled crime, social engineering fraud, and governance risks linked to AI adoption, are prompting (re)insurers to reshape coverage structures
- Regulatory developments in Brazil (i.e., new insurance legislation – Law 15.040/2024) and Argentina (i.e., deregulation initiatives) may create both challenges and opportunities for (re)insurers, influencing underwriting strategies and standards and compliance-driven coverage enhancements
To Summarise
The Financial Institutions insurance market is set to remain a strong buyer’s market in 2026, with competitive conditions and average premium reductions of 7.5%. While the pace of rate decreases may slow slightly, insurers are increasingly accommodating digital asset exposures and offering multi-year placements for added stability. Globally, London insurers continue to lead with significant capacity, competitive terms, and innovative solutions for emerging risks.
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