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Navigating insurance market disruptions

What to look for in a Financial Lines partner

By David Guild |Head of Financial Lines, MSIG USA

The management liability insurance market has seen a significant transition over the past couple of years. Several carriers have exited, while others have restricted capacity, leaving brokers and insureds seeking reliable partners through this market cycle, which is both over-capacitated and increasingly volatile. This comes as the average award against corporate defendants in US lawsuits surges, reaching $65.7 million in 2023.

The reasons behind this instability are clear. Poor loss ratios in management liability from 2015 to 2019 have resulted in a profitability drag for many carriers. While the COVID-era hard market provided a temporary boost with elevated rates, pricing pressures returned when conditions normalized and competition increased. Beyond the market’s own challenges, broader economic and geopolitical forces — such as rising inflation, shifting trade alliances, and supply chain disruptions — are adding to the volatility and uncertainty.

Not all insurers have the discipline or expertise to manage these long-term risks. For principals at the insured and their respective brokers, selecting the right insurer should not be solely about price or capacity. It’s about finding a partner with the resilience, expertise, and strategic foresight to navigate the turbulence ahead.

Key Considerations for Insureds

For insured individuals and entities, management liability coverage isn’t just about meeting insurance requirements, but also about protecting their personal assets, as well as the business, from the unpredictable or unexpected. You need a stable, experienced, and financially sound insurer that won’t disappear when the market shifts again. Here’s what to prioritize:

• Finding a “safe harbor”: In a market  with ample capacity, not all insurers are built for the long haul. Some carriers are entering the management liability space quickly — whether through a managing general agent model or as a subsidiary of a larger financial institution — but they lack the expertise and commitment to sustain coverage when market conditions shift. When turbulence arises — from tariff changes, supply chain disruptions, or inflation — you need a well-capitalized insurer with a proven track record of stability and claims reliability to steer you through the storm.

• Deep expertise: Not all companies offering financial lines coverage are true insurance carriers. Many financial institutions create insurance operations as part of a broader suite of offerings focused on valuation growth rather than underwriting. Dedicated insurance companies prioritize loss ratios, risk management, and long-term sustainability. You need a partner that has deep expertise in financial lines and understands the unique risks faced by businesses and financial institutions.

• Predictability beginning with the primary: Stability in your first layer of coverage is critical. Choosing an insurer that may not be there long term introduces unnecessary risk to your management liability program. For example, a board’s primary concern isn’t saving a few percentage points on their directors and officers premiums — it’s ensuring they have a sustainable, predictable program that allows them to focus on running the business rather than dealing with coverage uncertainty.

• Stability in a shifting global landscape: Global business alliances are evolving, and companies are expanding across borders. The scale and scope of a company’s operations has never before seen such potential for growth, but with that enhanced risk identification and management. You need an insurer that can remain a consistent partner as the global landscape changes. An insurance carrier with a broad global footprint can better inform underwriting and claims handling locally.

Key Considerations for Brokers

The right insurer can enhance a broker’s credibility, support client retention, and provide a competitive edge, especially in a complex management liability market. Here’s what to prioritize in the right partner, and why it matters for service delivery and client satisfaction:

• Claims should be a top priority: A management liability policy is only as good as the insurer’s ability — and willingness — to pay claims fairly and efficiently. When a claim arises, brokers are often the first call. Look for carriers that integrate their claims team early in the relationship, demonstrate clear communication about their claims philosophy, and have a track record for timely and fair claims handling.

• Strong communication throughout the policy lifecycle — not just at renewal: Last minute surprises can easily erode client confidence. Strong communication from the insurer solidifies your advisory role and allows you to be proactive. Look for insurers that provide regular updates on market conditions, underwriting appetite, and claims trends to their brokers and insureds alike.

• Underwriting strength: Market conditions fluctuate, but an insurer’s underwriting discipline determines whether they will be there when clients need them most. Brokers must align with carriers that can withstand hard and soft markets without reckless expansion or sudden withdrawals.

• Global reach and local expertise: Approximately 56% of businesses in the US are considering international expansion, exposing them to cross-border risks. However, not all insurers can execute claims and coverage properly in foreign jurisdictions — which can create major challenges when a claim arises. Look for insurers with established global networks that can provide jurisdiction-specific expertise.

MSIG is a strong insurance partner with deep expertise in management liability coverage. To learn more about how to keep your business or clients protected, please visit: https://www.msigusa.com/financial-lines/

David Guild is the Head of Financial Lines at MSIG USA, where he leads the strategic direction and underwriting of management liability, professional indemnity, and other financial lines products. With over two decades of experience in the insurance industry, David has a deep understanding of the evolving risks facing businesses and financial institutions. He is instrumental in helping brokers and clients navigate complex market conditions by developing tailored risk management solutions and helping to ensure long-term coverage stability. His expertise in underwriting provides a trusted partnership in an increasingly volatile landscape. At MSIG USA, David is committed to delivering stable, long-term solutions that help businesses navigate uncertainty with confidence.