D&O Liability Trends and Strategies for 2022An interview with
Marsh’s Risk in Context podcast series helps listeners better understand key risks, build more effective insurance programs, and think creatively about risk and resilience.
Directors’ and officers’ liability (D&O) coverage is essential for public companies and their senior leaders. But the market has been experiencing challenges in recent years, with rising rates and increasing insurer scrutiny. CL Proferes, product and industry leader for Marsh’s FINPRO Practice, Stephanie Manson, head of management liability within Marsh’s UK FINPRO Practice, Matt McLellan, Marsh’s US D&O product leader, and Jennifer O’Neill, multinational leader in Marsh’s FINPRO Practice in the US discuss key trends in the D&O insurance market.
On the current state of the US D&O market:
“So companies are, on average, still seeing premium rate increases, but those increases have gone down significantly. And so, sort of related to that is really an increase in competition from the insurance companies.” — Matt McLellan
On movements in the D&O market in the UK:
“The price increases are slowing significantly in the London market, but there remains a wide variation in pricing movement, depending on historic program pricing, perceived risk quality, and individual insurers’ overall books of business and strategy. … There’s new capacity that’s entered the market over the course of 2021. And many of the longer-term players are also looking for growth.” — Stephanie Manson
On increased market competition:
“We’re not seeing the competition heat up because the losses are going away. It’s because of the capacity now that’s entering the market.” — CL Proferes
On current regulatory trends:
“From a regulatory standpoint, what we’re seeing is a lot of stated ambition from the part of regulators. The Securities and Exchange Commission has formed a task force on ESG, certainly looking at releasing more guidance on disclosure issues. They’re looking at insider trading rules, executive compensation. Certainly, there’s been a focus from the government and the DOJ on individual accountability. … From a regulatory standpoint, that environment is certainly becoming more focused on a lot of these issues that shareholders have been looking at.” — Matt McLellan