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Asset management market update Q1 2020

Financial, Executive and Professional Risks (FINEX)

By Timothy M. Sullivan | April 22, 2020

A series of insights diving into the latest liability insurance market trends, issues and activities for non-publicly traded asset managers and their sponsored funds.

We are pleased to present FINEX’s Asset Management market update for Q1 2020. In this issue, we explore the current state of the Directors’ & Officers’ and Errors & Omissions (D&O/E&O) liability insurance market for non-publicly traded asset managers and their sponsored funds. In addition, we identify new and emerging issues within the asset management industry and discuss what impact those issues may have on D&O/E&O insurance policies.

As Q1 2020 came to a close, the entire world was responding to the unique and unexpected personal and professional challenges presented by the COVID-19 pandemic. Unprecedented in its scope, the virus itself, along with the market volatility that followed, has already had tremendous consequences for virtually all industries and all lines of coverage across the globe. It has been the most significant issue affecting both asset managers and the D&O/E&O insurance market this quarter and will likely continue to do so for the foreseeable future.

Though the full extent of the virus’ impact on D&O/E&O insurance for asset managers is yet unknown, we do know that the pandemic has added a new layer of volatility on top of an already challenged insurance environment. As a result, insurers are taking a far more cautious approach to the renewal process and are expected to be far more invasive in their underwriting protocols than in years’ past. Renewals will be challenging so beginning the renewal process early is critical, as D&O/E&O insurers will likely seek increases in both premiums and retentions, while carefully managing the limits they will provide and scope of coverage they will afford.

Although the COVID-19 pandemic is the most prominent issue currently, we have not lost sight of the fact that other new and emerging issues are also affecting the asset management industry. Noteworthy items addressed within this edition include the rise of various accountability regimes, such as the Senior Managers & Certification Regime, the increased focus on “greenwashing”, and the rising concerns relating to fund liquidity. We discuss these issues in detail and identify the potential implications they may have on an asset manager’s risk profile, as well as their D&O/E&O insurance policies.

There are many challenges facing asset managers this year. However, we hope this publication offers valuable insights to help you successfully navigate through these turbulent times. Should you have any questions or wish to discuss any of these issues in greater detail, please engage myself or a member of your Willis Towers Watson team.

Table of Contents

  1. 01

    Asset management market update

    Timothy M. Sullivan | April 22, 2020

    A deep dive into the D&O/E&O insurance market, including a focus on cost, markets, targeted segments, capacity and coverage.

  2. 02

    Asset management industry trends

    Timothy M. Sullivan | April 22, 2020

    Key issues for non-publicly traded asset managers surrounding top industry concerns.

  3. 03

    SEC notable activity

    Timothy M. Sullivan | April 22, 2020

    Observations on notable SEC activity surrounding non-publicly traded asset managers and their sponsored funds.

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Asset management market update Q1 2020 PDF .9 MB

Asset Management Industry Leader, Willis Towers Watson

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