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.
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.
Looking forward, we expect the market to stay favourable to insureds with some premium reductions continuing and stable capacity but we envisage that the rate of reductions will slow down. There are still plenty of insurers which are looking to offer additional capacity or move down on programmes which will keep the market competitive over the course of the year. We anticipate that retentions will remain stable.
Whole Tower median rate on line has stabilised to some extent but year on year, the median rate has decreased by 14% while the mean has decreased by 10%.
Primary layer rate on line figures are in a similar position to the Whole Tower, with median year on year decreases of 22% and mean decreases of 17%. See Chart 4 in Appendix I.
While notifications in 2024 are up on 2023, these figures are significantly affected by one particular client having notified a large number of matters. If that client’s notifications are removed, notifications in 2024 would be below the 2023 figure.
This year’s Global Directors’ and Officers’ Survey Report (in collaboration with international law firm, Clyde & Co LLP) has been published.
You can find a summary of our main findings and accompanying articles here: Global Directors’ and Officers’ Survey Report 2024/2025
We have just launched a new version of the DARCstar 2025 wording. We have worked with leading insurers in the London market to negotiate a fantastic new version of DARCstar with many improvements. Some of the headlines include:
We have also updated the wording for our A-Star facility bringing key improvements for all clients and also adding a US Endorsement for US domiciled clients to make sure the wording is one of the best available for all of our clients.
| Min | Max | Notes | |
|---|---|---|---|
| Rate on Line | 0.01% Rate on Line | No max | Rate on Line is calculated by dividing the premium by the limit of liability that is being purchased and expressing that as a percentage. This shows the proportional cost of the limit of liability being purchased by each client. |
| Rate on Line change | 0.01% Rate on Line | No max | We are comparing the Rate on Line paid last year to the Rate on Line paid this year for a given client at renewal. |
Figures in this report are based on WTW FINEX FINMAR client placements, sourced as 26 February 2025, and WTW client notifications from GB placements only, between 1 January 2007 to 31 December 2024. They will be updated periodically to reflect additional records. Graphs in this report show the moving averages between January 2022 and Q4 2024.
An ABC placement is one which includes cover for Side A (D&O non-indemnified loss), Side B (D&O indemnified loss) and Side C (Company Securities Claims).
