D&O Global trends, insurance capacity and pricing

Date: Monday, November 8th, 2021 by Michaela Hickson.

Welcome to Global Insurance Law Connect’s first review of international D&O insurance markets. We decided to write this report because of the scarcity of information on how D&O cover, pricing and availability compares across different global markets. In many countries D&O rates are rising, and in some places those increases are extreme, but this is not the case everywhere. In a few markets the green shoots of recovery are showing, as clients reach the limits of what they are prepared to pay, and prices look set to finally stabilise.

There are other tumultuous events impacting D&O too. The global shocks of the pandemic have brought corporate turmoil, fuelling a huge spike in corporate M&A as the weak are bought by the strong, and the well-positioned take advantage of changing markets to expand into new regions through acquisitions. This in itself brings great pressure to bear on directors and officers across the board meanwhile, alongside, many companies are also seeing exposure to new risks brought about by home-working and other pandemic impacts.

Finally, the increase in cyber attacks is driving growth in litigation by those affected, and in many cases the litigant will also name directors and officers within any class action, also increasing the perils for elected company officers. Regulation is a further factor in the mix.

Together, this all adds up to an increased need for protection for directors and officers, in a market which lacks capacity to supply it. The impact has been a notable growth in self-insuring for this class of cover, alongside the increased use of letters of indemnity for directors and officers.

In the following pages we have reviewed the global trends highlighted above; while the second half of our report gives you a snapshot of how D&O coverage shapes up country by country.

 

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