Q1 2025 State of the Market: Bermuda Professional Lines
From the desk of Vernae Outerbridge, Head of Professional Lines, Price Forbes Bermuda
Market Update & Emerging Trends
As we wrap up Q1 2025, the Bermuda Professional and Financial Lines market showcases a dynamic and evolving landscape. Although the downward pricing pressure on Directors & Officers (D&O) liability from 2024, Bermuda carriers continue to evolve. Emerging complexities such as geopolitical developments, evolving regulatory frameworks, and the integration of new technologies are creating exciting dynamics that carriers and insureds can navigate thoughtfully.
Directors & Officers (D&O)
The drive for rate reductions continues into 2025. However, this softening is tempered by significant market anxieties.
Carriers are closely monitoring the potential ripple effects of the proposed US “Tariff War.” Concerns centre on the operational and financial performance impact on insureds, with an expectation that market volatility could fuel an increase in Securities Class Actions (SCA) among public companies.
The much-anticipated Q4 resurgence in IPOs and SPAC/deSPAC activity didn’t fully materialize, with IPO offerings down 17% and some post-offering stock declines. While the modest uptick from Q4 2025 continued into Q1, uncertainty stemming from new trade policies has added unforeseen complexities, affecting both IPO and deSPAC transactions.
Employment Practices Liability (EPL)
Following recent US Executive Orders (including the revoking of EO 11246), carriers are paying significantly closer attention to Diversity, Equity, and Inclusion (DEI) initiatives and exposure. This has already led to a small number of reverse discrimination claims; a trend markets anticipate may grow throughout the year.
The EPL pricing environment is steadying. While significant rate hikes are generally not the norm, carriers are typically pushing for flat renewals or minimal increases, reflecting the evolving risk landscape.
Wage & Hour (W&H)
We’ve noted a distinct uptick in W&H inquiries. As insureds benefit from rate reductions in other lines like D&O, they are strategically reallocating savings to broaden their risk management portfolios, with W&H becoming a key area of focus.
That, said, placing W&H remains challenging. Program structures are often complex with little indication of reductions. This resilience is directly linked to the significant quantum and value of claims carriers are experiencing within their W&H books.
Despite the complexities, the Bermuda market remains supportive of W&H risks.
Overarching Considerations & Emerging Risks
AI integration: The increasing integration of AI into core business operations poses new liability risks. Boards face the challenge of adapting governance and oversight in real-time to mitigate exposures arising from potential mismanagement of AI technologies or inadequate control over data usage.
Changing political landscape: While recent US Presidential executive orders may create a more favourable legal landscape for corporations on paper, instantaneous market valuations will serve as the ultimate litmus test for how companies perform. These variables are under intense scrutiny, yet there remains a cautious optimism that the overall D&O space will maintain a generally positive trajectory through 2025.
Bermuda Specific Market Updates
Helix Underwriting Partners: MGA offering Professional Lines capacity across multiple lines
- Paper/Security: Somers Re (A- Rated by AM Best)
- Maximum Limit: $10m (specific line deployment varies)
- In-house Claims Handling
- Target Appetite & Anticipated Line Sizes (Year 1):
- – E&O (LPL, A&E, Consultants, Accountants): $5m – $7.5m, attaching excess $50m
- – D&O: $5m, excess $50m (ABC or Side A)
- – EPL/Management Liability (Law Firms & Commercial): $5m – $7.5m, excess $25m
- – W&H: $5m – $7.5m, excess $25m
- – Cyber/Tech E&O: $5m, excess $50m
- – Transactional Liability (TL): Tax and Representations & Warranties considered (no contingency).
Primary Wage & Hour Expansion: As mentioned, Vantage and AXA are now actively writing Primary Wage & Hour coverage, focusing on opportunities for SME clients.
AXA XL Cyber Enhancement: AXA XL has introduced an innovative Cyber Punitive Damages Endorsement. The key development is conditional coverage for “remediation expenses”, defined as the non-monetary injunctive/compliance costs regulators often impose alongside penalties to prevent future violations. These costs are frequently excluded under standard primary cyber policies due to their open-ended nature or potential for betterment.
Markel Bermuda
In a notable market shift, Markel Group will no longer be writing public D&O and large FI out of the US. Consequently, Bermuda will become the centre of excellence for these lines of business.
Recent Wins
Global high-tech leader: Successfully placed a complex, multi-line program for a major American blue-chip multinational company operating globally within the high-tech industrial sector, highlighting Bermuda’s strength in handling sophisticated global exposures.
Multinational retail giant: Secured a significant placement for a prominent multinational retail company known for its extensive operations and market influence, showcasing our ability to structure solutions for established leaders with complex risk profiles.
Cutting-edge technology innovator: Successfully secured vital capacity for a leading company operating at the forefront of blockchain and AI technology, demonstrating our agility and appetite for pioneering technology risks.
Bermuda remains a vital hub for complex Professional and Financial Lines, offering significant capacity and pioneering solutions. Speak to us today and see how we cut through complexity with confidence, helping secure optimal outcomes for your clients tomorrow.
Vernae Outerbridge, Head of Professional Lines
Price Forbes Bermuda
Vernae.Outerbridge@priceforbes.com
T: +1 441 707 0099 | M: +1 441 707 0099