Directors & Officers The Directors & Officers (D&O) insurance market is now trending towards stabilization after a period of significant rate reductions. Insurers are emphasizing value beyond pricing, such as enhanced coverage and increased sub-limits. While premium decreases are still present within the marketplace, insurers are expected to push for flat renewals. Private Companies & Nonprofits › Competition and capacity remain high, with most insurance carriers looking to grow their respective books of business. › For smaller risks, insurers are providing automatic renewals with little or no underwriting information to keep renewal pricing flat or add a couple points of rate. › Private companies continue to face risks typically associated with public companies, including: • Shareholder/breach of fiduciary duty complaints • Regulatory issues • Bankruptcy/Insolvency • Alleged unfair business practices • Geopolitical issues • Economic uncertainty, including the impact of tariffs, interest rates and a potential recession • Increased litigation costs • AI utilization Public Company D&O › According to a recent release from Cornerstone Research, the number of federal and state securities class action lawsuits filed increased in 2024 for the second year in a row, reaching the highest level since 2020. › One significant factor contributing to the overall increase in securities class action lawsuit filings in 2024 was the significant number of theme-related filings: • AI-related filings increased to 15 in 2024, compared to only seven in 2023. • COVID-19-related filings increased from 11 in 2023 to 15 in 2024. • SPAC-related filings decreased from 27 in 2023 to 11 in 2024. Overall, these three trend categories (AI, COVID-19, and SPACs) accounted for nearly 20% of all 2024 securities lawsuit filings. › Financially sound public companies continue to experience a competitive D&O environment with plenty of capacity. › While softer market conditions continue, incumbent underwriters are expected to hold premiums closer to flat compared to last year. › As capacity remains available, continued competition for excess layers is anticipated. › Underwriters are expected to closely monitor claims trends, which may lead to more selective underwriting. › There are mixed opinions on regulatory enforcement under the new administration, with expectations that the focus of investigations will change. › The continued impact of artificial intelligence (AI) and cyber threats may signal a changing claims environment. › Tariffs, lingering inflation and a potential recession could weigh on investor confidence and the IPO market.
Back to Contents »
© 2025 Unison Risk Advisors TM . All rights reserved.
Made with FlippingBook Digital Publishing Software