Insurance Marketplace Realities 2025 – Fidelity/crime

Rate predictions: Fidelity/crime

	Trend	Range
Fidelity bond		Flat
Commercial crime		Flat

SFAA data suggests that the crime/fidelity bond product continues to be profitable for insurers.

• The top five writers of crime and fidelity bonds have loss ratios below 50%.
• These carriers account for more than 50% of the direct premium written.
• Carriers look to expand their existing client relationships by offering competitive crime/fidelity bond coverage.

The potential impact of artificial intelligence on the fidelity/crime market is yet unknown.

• “Deep fakes” go beyond traditional social engineering schemes by providing an audible or visual impersonation directing the fund transfer.
• These schemes are more convincing as the wire transfer instruction is confirmed via voice or virtual call.
• Carriers have not made any changes to coverage to address AI as of yet.

Business email compromise (BEC) or social engineering claims continue to cause concern.

• The FBI has confirmed that BEC claims accounted for more than $2.9 billion in losses in 2023 alone.
• Coverage for these claims is often sub-limited, though excess SEF limits are available.
• Improper verification control is the root cause of more than 50% of social engineering losses.
• Carriers look to fine tune their approach to underwriting this coverage given the increased sophistication of social engineering fraud attempts.

The financial institution sector has seen a resurgence in check kiting claims.

• According to data from the Financial Crimes Enforcement Network, the number of suspicious activity reports (SARs) for check fraud doubled in 2023.
• Check kiting schemes artificially inflate an account balance allowing the fraudster to then make a withdrawal. These schemes have historically been mitigated with waiting periods and real time verification of account balances.
• Coverage for check kiting is typically sub-limited for financial institutions.
• Recent reports of fraudsters exploiting “glitches” in their banks computer system or process have brought to light this is still a legitimate area of concern.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).