D&O state of the market report Q1 2022 ‒ January 2022

After a year of high demand in 2021 the insurance market for Directors & Officers’ (D&O) liability cover is showing greater signs of stabilisation, according to the Gallagher United Kingdom D&O team’s report on their international clients in the Global State of the Market Report for Directors and Officers’ released January 2022.

The report credits this shift in this client sector as being partly due to the long-tail nature of D&O claims extending back to the previous year, so that huge rate increases for 2020 D&O liability insurance ‒ as much as +70% for some businesses ‒ continued in 2021. The trend was exacerbated by a spike in demand in early 2021 when the London D&O market especially was under considerable stress due to the gap between demand and supply.

Now the balance is starting to shift in some clients' favour with a reduction in IPOs brought to market and the arrival of new market D&O insurance entrants. These arrivals, coinciding with a reduction in securities litigation frequency in this client base, mean that 2022 should provide some rate reductions, and strong returns on underwriting results should drive competition.
With new capacity entering the market during 2021 increasing underwriting competition, this in turn is leading to some lowering of premium rates.

“Greater confidence in terms of risk selection and improved trading conditions is resulting in more attractive terms being offered by insurers.”
Michael Herron, National Head of Financial Lines ‒ Professional & Financial Risks, Gallagher Australia 

In this latest report, we examine
•    the dynamics of the London insurance market and where pricing will go in 2022
•    how insurers are treating different industry sectors and the outlook for this year’s renewals, with some case studies
•    market overview including changing conditions in D&O markets globally, including Australia, Canada, the US and South Africa
•    how best to prepare your business for renewal, including a 5-step formula for presenting business risk management profile to potential insurers.

Download the report.