Introduction
This update analyses our observations of the current market conditions for Directors’ and Officers’ insurance (“D&O”) and the impact this has on board directors, non-executive directors and insurance buyers and is based on our observations of the market with our WTW clients and not a whole of market review. For ease of understanding, the percentages have been presented as rounded figures.
Overview
While there were some fluctuations in 2024 (particularly in Q2), overall a significant majority of our clients saw decreases in their D&O insurance premiums, with 81% of clients seeing renewals with a decrease or flat premiums.
Anecdotally, many insurers are expressing concerns about rates, and recent challenges in the US D&O insurance market appear to be having a suppressing effect on further rate decreases in the US. We are hearing increasing concerns around pricing adequacy in certain higher risk segments of their portfolios and so we expect to see a stronger push to hold rate by incumbents in these segments.
Nonetheless, we continue to see insurers willing to offer decreases, albeit perhaps not at the same levels that were seen in 2023. Early in 2025 we have seen insurers in London start to try to resist pricing reductions and even some excess layer insurers withdrawing from specific risks where pricing is particularly low, however, there is still alternative capacity available.
Policy terms continue to see insurers willing to take a softer stance including supporting WTW’s new version of the Directors All Risks Cover (DARCstar 2025) which we launched at the start of this year. Insurers are still keen to offer Long Term Agreements, but these are rarely taken up by insureds as the terms are not sufficiently attractive.
The number of notifications has increased on last year, but the figures are swayed by one particular client notifying a significant number of matters (see chart 2 below). Without that client’s multiple notifications, the figures would be down on last year.
