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Wednesday, April 05 2017

Directors and officers liability policies are likely to become broader and continue getting cheaper in 2017. This is among the likely trends expected for the financial and professional liability insurance marketplace in the months ahead, insurance broker Marsh said in a new report, “The U.S. Financial and Professional Market in 2017: Our Top 10 List.”

Marsh said that public directors and officers (D&O) liability insurance rates will keep dropping in 2017, following nine continuous quarters of rate decreases. But the rate of decline should slow somewhat, despite a spike in federal filings, according to the report.

There was a notable spike in federal filings in 2016 — the most since 2002. However, “the impact from those claims will take months, perhaps years, to be reflected in insurance rates,” Marsh said.

As price declines continue, however, the market is seeing a related trend: pure individual D&O coverage policies are fading, with insurers focusing on broadening their D&O offerings and making them unique to stay competitive, Marsh said.

Among the ways insurers are trying to keep their D&O offerings unique: providing or improving entity investigation cost coverage, adding reinstatement of limits for full coverage, and continuing increases in excess derivative investigative cost sublimits. Excess insurers are also reimbursing a percentage of an insured’s retention, if able to successfully obtain an early securities class action dismissal with prejudice, Marsh said.

Posted by: AT 12:49 pm   |  Permalink   |  Email
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