The Expanding Risk Frontier

Risk profiles across the financial lines segments are undergoing a profound transformation driven by tech, regulation and societal change. Financial institutions are grappling with the regulatory and operational challenges stemming from the rise of fintech – from digital banking and mobile payments to cryptocurrency and blockchain infrastructure. These advances are expanding the universe of risk exposures that didn’t exist even a few years ago, forcing insurers and clients to rethink traditional risk models.

Beyond the Financial Institutions segment, the Private/Non-Profit segment is facing its own recalibration of risk. Employment practice liability claims have surged in frequency and severity, with outsized settlements becoming increasingly common. On the Public Company Management Liability front, SPAC and IPO activity was strong heading into the backend of 2025, driven by a friendly regulatory environment and strong investor demand – especially in growth-oriented areas such as technology and digital assets. However, many are questioning how market volatility, policy and regulatory change, and tariffs may impact public listing and M&A activity in 2026. Despite potential headwinds, the SEC has introduced certain policy changes with the aim of revitalizing IPO activity by way of quicker and more economic dispute resolution procedures.

At the same time, the cyber threat landscape continues its relentless evolution. Ransomware attacks have become increasingly sophisticated, with threat actors constantly developing new infiltration strategies. Systemic cyber incidents, in which a single software failure impacts multiple companies simultaneously, represent a growing aggregation risk.

Across all segments, the rise of AI-generated content and products has introduced new categories of liability disputes that didn't exist even two years ago. Altogether, these forces are reshaping how underwriters, brokers and clients measure, price and mitigate risk.