Insurance Market Update: Directors & Officers
The D&O insurance market has continued to soften in 2024, with this trend expected to continue into 2025.
The number of insurers offering D&O cover to ASX-listed organisations (both primary and excess layers) has increased.
This has resulted in greater competition at renewal and for new business.
Despite the competition, insurers remain cautious, particularly around Side C (entity) cover.
There is a strong focus on insolvency risk, with insurers scrutinising financial visibility, especially for companies in destressed sectors.
Market Conditions
Intensified competition due to insurers missing growth targets las led to average premium reductions of 10%-20%.
A decline in IPOs and M&A deals has reduced large one off premiums opportunities, putting further pressure on insurer budgets.
Low claims activity in recent years has attracted new market entrants and renewed local interest.
London-based insurers and Llyod's syndicates setting up local offices have added to the competitive pressure, driving down rates.
Caution is advised as past soft markets have led to sharp conditions when claims activity (e.g., class actions) increased - historically causing capacity reduction, premium hikes, or even market exits by insurers.
Cyber risk and organisational cyber maturity, including the use of AI, remain key underwriting considerations.
ESG (Enviromental, Social & Governance) frameworks are under increasing review and rising regulatory scrutiny.
Insurers are closely monitoring the solvency of organisations, especially in distressed sectors like construction and retail.
Opportunities in the Current Market
Soft market conditions present a rare window for organisations - both public and private - to strengthen their D&O programs ahead of the next hard market cycle.
Review Program Structure: Revisit removed covers, consider s=cost-effective options or reduce deductibles if previously increased.
Reassess Limits: Are your limits still fit for purpose? If reduced in past years, now may be the time to increase them - especially if the business is growing.
Insurer Stability Matters: While new entrants bring pricing competition, partnering with stable insurers ensures long-term support and stronger renewal outcomes.
Smart Use of Savings: Reinvest savings into higher limits, broaden coverage, or bolster other key policies like cyber. Some may choose to bank savings to strengthen balance sheets.
Expectations for 2025
Soft conditions are expected to continue into 2025 - but a market correction remains a real possibility. While claims activity is low now, emerging risks like cyber and ESG remain under regulatory scrutiny and could trigger a rise in class actions.
Now is the time for organisations to lock in program improvements and build resilience ahead of any future tightening.
Maintaining insurer stability should stay front of mind - partnering with incumbents can help secure sustained premium relief over multiple renewals.
Jasmin Gabrielli
Jasmin is an experienced insurance professional with over 11 years of general broking expertise across a diverse range of general and hard-to-place specialty lines specifically in commercial applications.
The D&O insurance market has continued to soften in 2024, with this trend expected to continue into 2025.
The number of insurers offering D&O cover to ASX-listed organisations (both primary and excess layers) has increased.
This has resulted in greater competition at renewal and for new business.
Despite the competition, insurers remain cautious, particularly around Side C (entity) cover.
There is a strong focus on insolvency risk, with insurers scrutinising financial visibility, especially for companies in destressed sectors.
Market Conditions
Intensified competition due to insurers missing growth targets las led to average premium reductions of 10%-20%.
A decline in IPOs and M&A deals has reduced large one off premiums opportunities, putting further pressure on insurer budgets.
Low claims activity in recent years has attracted new market entrants and renewed local interest.
London-based insurers and Llyod's syndicates setting up local offices have added to the competitive pressure, driving down rates.
Caution is advised as past soft markets have led to sharp conditions when claims activity (e.g., class actions) increased - historically causing capacity reduction, premium hikes, or even market exits by insurers.
Cyber risk and organisational cyber maturity, including the use of AI, remain key underwriting considerations.
ESG (Enviromental, Social & Governance) frameworks are under increasing review and rising regulatory scrutiny.
Insurers are closely monitoring the solvency of organisations, especially in distressed sectors like construction and retail.
Opportunities in the Current Market
Soft market conditions present a rare window for organisations - both public and private - to strengthen their D&O programs ahead of the next hard market cycle.
Review Program Structure: Revisit removed covers, consider s=cost-effective options or reduce deductibles if previously increased.
Reassess Limits: Are your limits still fit for purpose? If reduced in past years, now may be the time to increase them - especially if the business is growing.
Insurer Stability Matters: While new entrants bring pricing competition, partnering with stable insurers ensures long-term support and stronger renewal outcomes.
Smart Use of Savings: Reinvest savings into higher limits, broaden coverage, or bolster other key policies like cyber. Some may choose to bank savings to strengthen balance sheets.
Expectations for 2025
Soft conditions are expected to continue into 2025 - but a market correction remains a real possibility. While claims activity is low now, emerging risks like cyber and ESG remain under regulatory scrutiny and could trigger a rise in class actions.
Now is the time for organisations to lock in program improvements and build resilience ahead of any future tightening.
Maintaining insurer stability should stay front of mind - partnering with incumbents can help secure sustained premium relief over multiple renewals.
Jasmin Gabrielli
Jasmin is an experienced insurance professional with over 11 years of general broking expertise across a diverse range of general and hard-to-place specialty lines specifically in commercial applications.
The D&O insurance market has continued to soften in 2024, with this trend expected to continue into 2025.
The number of insurers offering D&O cover to ASX-listed organisations (both primary and excess layers) has increased.
This has resulted in greater competition at renewal and for new business.
Despite the competition, insurers remain cautious, particularly around Side C (entity) cover.
There is a strong focus on insolvency risk, with insurers scrutinising financial visibility, especially for companies in destressed sectors.
Market Conditions
Intensified competition due to insurers missing growth targets las led to average premium reductions of 10%-20%.
A decline in IPOs and M&A deals has reduced large one off premiums opportunities, putting further pressure on insurer budgets.
Low claims activity in recent years has attracted new market entrants and renewed local interest.
London-based insurers and Llyod's syndicates setting up local offices have added to the competitive pressure, driving down rates.
Caution is advised as past soft markets have led to sharp conditions when claims activity (e.g., class actions) increased - historically causing capacity reduction, premium hikes, or even market exits by insurers.
Cyber risk and organisational cyber maturity, including the use of AI, remain key underwriting considerations.
ESG (Enviromental, Social & Governance) frameworks are under increasing review and rising regulatory scrutiny.
Insurers are closely monitoring the solvency of organisations, especially in distressed sectors like construction and retail.
Opportunities in the Current Market
Soft market conditions present a rare window for organisations - both public and private - to strengthen their D&O programs ahead of the next hard market cycle.
Review Program Structure: Revisit removed covers, consider s=cost-effective options or reduce deductibles if previously increased.
Reassess Limits: Are your limits still fit for purpose? If reduced in past years, now may be the time to increase them - especially if the business is growing.
Insurer Stability Matters: While new entrants bring pricing competition, partnering with stable insurers ensures long-term support and stronger renewal outcomes.
Smart Use of Savings: Reinvest savings into higher limits, broaden coverage, or bolster other key policies like cyber. Some may choose to bank savings to strengthen balance sheets.
Expectations for 2025
Soft conditions are expected to continue into 2025 - but a market correction remains a real possibility. While claims activity is low now, emerging risks like cyber and ESG remain under regulatory scrutiny and could trigger a rise in class actions.
Now is the time for organisations to lock in program improvements and build resilience ahead of any future tightening.
Maintaining insurer stability should stay front of mind - partnering with incumbents can help secure sustained premium relief over multiple renewals.
Jasmin Gabrielli
Jasmin is an experienced insurance professional with over 11 years of general broking expertise across a diverse range of general and hard-to-place specialty lines specifically in commercial applications.
