Directors' & Officers' Liability Insurance 2022 Outlook: 'Light on the horizon'

Our first Directors' & Officers' (D&O) Liability Insurance report shows that plateauing premium prices and increased insurer appetite is leading to more favourable buying conditions in the London market

In our latest report, 'Light on the horizon', we have used our own FY22 Q1 pricing and claims data, to show that London's D&O insurance market is transitioning from a 'hard' to 'soft' market, creating more positive buying conditions.

Since 2018, the D&O market has been extremely difficult, with reduced capacity and insurer appetite resulting in substantial premium increases. However, we have found that the 2022 outlook is brighter, with premium prices already starting to plateau and even move downwards, driven by improving insurer appetite and more capacity being available, with a wave of new insurers and ESG-propelled capacity initiatives entering the market.

You can read the report by clicking here.

Key Findings:

Plateauing premium prices

Howden’s premium rate change tracking so far in 2022 has been at 1.5% compared to 15% in 2021 and 88% in 2020. Early signs in 2022 have also shown that premium prices have even been reduced, further supporting signs of a more favourable market. With lower premium rates forecasted, insurers will look to put out more capacity to equal out the reduction in premium prices.

Increased insurer appetite

We show which insurers have featured in our top 20 for GWP since 2018, showing how appetites have ebbed and flowed since 2018, with sharp increases towards the end of 2021.

Emerging claims trends

This 2022 outlook also suggests that buyers should be mindful of emerging trends that are impacting insurance claims. Including, Environmental Social Governance (ESG), how the phasing out of government support schemes such as furlough may link to a rise in insolvencies, the ever present threat of cyber-attacks and the war in Ukraine.

How claims are shaping the market

By collating our own claims data, we have noticed a steep rise in D&O related claims since 2020 and analysed how a rise in the number of US securities class action filings and third party litigation funding are factors in this marked increase.