Our Two-Minute Takeaway provides a quick, high-level overview of notable topics and trends in the marketplace.  Read on to learn more about what’s happening in the executive liability space.  

Overall, the market has seen price improvements, reduced retention obligations, improved terms and higher limit availability. 

D&O: Public Companies 

For public companies, this trend can be attributed partly to action in the IPO and SPAC marketplace. Current renewals on public companies that underwent an IPO or significant transaction in recent years face an average of 40% or greater decreases. Additionally, many customers that experienced an IPO are seeing decreases in retentions upon renewal, as there is a renewed interest in those programs compared to the previous two years. Ancillary lines follow a similar pattern, continuing to stabilize. Additionally, the number of securities class actions has decreased compared to 2017-2020. 

Environmental, social and governance (ESG) continues to be a trending topic for this space, as expectations are rising from both shareholders and regulators for D&O responsibility and oversight. Carriers are more attentive toward how a company handles ESG, data and cyber security when evaluating their appetite for coverage.  

D&O: Private Companies and Non-Profits

This positive overall trend is also impacting private companies and non-profits. Carriers that had pulled back in the past for underwriting are now reentering the space. With the combination of the softened market and increased carrier appetite, the results are typically more favorable terms and conditions, premiums and retentions. 

Other Factors Impacting the Marketplace

Employment practices liability continues to see retention increases for high wage-earners, troubled States and class actions as underwriters find creative ways to underwrite difficult risks. Fiduciary liability continues to see excessive fee retentions that are significantly higher than the base policy retention, and social engineering claims continue to plague the crime marketplace. Litigation around excessive fees continues to hammer insurers, and the creativity around phishing scams continues to be an issue for crime insurers. 

As Q1 continues, it is anticipated that the market will continue to stabilize. Along with factors specific to this market, there are other considerations to be made regarding rising interest rates, inflation pressure, economic disruption and international conflict. After several years of a challenging market, the executive liability space seems to be heading on a positive trajectory.

Property & Casualty Team