In the third quarter of 2018, primary and total program pricing for directors and officers (D&O) liability insurance increased for the third consecutive quarter, indicates the report, The US Financial and Professional Lines Market in 2019: Our Top 10 List, produced by Guy Carpenter’s affiliate, Marsh.
This was the first time since the first quarter of 2014 that total program public company D&O pricing had seen an increase.
Due to continued deterioration in loss activity, the report expects D&O insurers to remain focused on profitability by way of increased rates. Generally speaking, the report anticipates continued pressure on primary, excess, and even Side-A premiums.
Some insurers have warned that this will not necessarily be a one-year “restoration” or “correction” of price increases. The report states that it expects to see low excess layers – those within the first USD 50 million in limits and especially first excess layers – to seek more significant rate adjustments. Other excess layers at higher attachment points will also likely continue to put pressure on rates.