We entered 2020 in a hardening financial lines marketplace, driven by several years of record high Securities Class Action filings, high profile and severe exposure employment practices lawsuits, increasingly sophisticated social engineering schemes and ransomware attacks that multiplied in quantity and severity. We conclude a turbulent 2020 and look to 2021 not with comfort that these exposures are in the rear-view mirror, but with clear awareness of claims trends that will continue to be a challenge.
Many of the issues facing us in 2021 will be COVID-19 related. For example, an uptick in directors and officers (D&O) lawsuits, both directly and indirectly tied to COVID-19 can be expected. For companies hit hardest by the pandemic, restructuring or bankruptcy may be inevitable. We formed the Strategic Solutions Group in 2020, which stands ready to help guide those companies through the insurance aspects of the process.
The employment practices liability insurance market will continue to be stressed by an increase in claims from those unemployed due to COVID-19 and claims arising from allegations around workplace safety. Further, the increase in ransomware and social engineering claims will only continue as employees work from home in greater numbers than ever before, expanding the attack surface for cyber criminals.
Non-COVID factors will also drive claims in 2021. A new federal administration could lead to a more aggressive regulatory and enforcement landscape. An emphasis on diversity has already led to D&O lawsuits. We expect this trend to continue to impact both D&O and employment practices liability insurance. Additionally, the focus on privacy will be a theme across all financial lines.
In this publication, the Willis Towers Watson FINEX North America Thought and Product Leadership team highlights articles we have produced in 2020 that helped guide insurance purchasing decisions, and we look to the future to highlight what we believe will be the most prevalent claims issues and underwriting considerations for 2021. As always, our Thought and Product Leadership team and our Claims and Legal Group are available to answer your questions anytime.
Please do not hesitate to reach out to me or any of the subject matter experts in this publication to discuss any of the articles in further detail.
Table of Contents
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01
FINEX Observer: Looking ahead to directors and officers (D&O) liability in 2021
For weary D&O insurance buyers: 2021 likely better than 2020, but still expected to start off hard.
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02
FINEX Observer: Cyber year in review
In our review of 2020, we explore the impact of COVID-19 on cyberrisks and its lingering effect into 2021.
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03
FINEX Observer: Employment practices liability year in review
COVID-19 and a hardening market impacted employment practices liability insurance in 2020 and will continue in 2021.
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04
FINEX Observer: Financial institutions year in review
After an unpredictable 2020, to say the least, what lies ahead for financial institutions in the year ahead?
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05
FINEX Observer: Fidelity year in review
More of the same in 2021 - a hard market impacts the fidelity and crime spaces.
Disclaimer
This Willis Towers Watson publication is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. If you would like additional information, please contact us. Some of the information in this publication may be compiled by third party sources, whilst we consider these to be reliable, we do not guarantee and are not responsible for the accuracy of such. The views expressed herein are not necessarily those of Willis Towers Watson. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates, for example: Willis Towers Watson Northeast, Inc. in the United States, Willis Canada Inc., in Canada.
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Head of the Claims & Legal Group FINEX North America
