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Survey Report

Insurance Marketplace Realities 2023 - Directors and officers liability

December 1, 2022

Increased capacity from newer market entrants and an improved securities litigation environment continue to drive more competitive market dynamics.
Financial, Executive and Professional Risks (FINEX)
Rate predictions: Directors & officers liability
  Trend Range
Stable risk profiles
Public company — primary neutral decrease increase (yellow line, purple triangle pointing up) -7.5% to +2.5%
Public company — excess layers neutral decrease (yellow line, purple triangle pointing up) -15% to flat
Private, not-for-profit — overall neutral decrease Increase (Purple triangle pointing up) -10% to +7.5%
Side-A/DIC neutral decrease (Purple triangle pointing up) -15% to flat
Challenged risk profiles
Non-U.S. parent, U.S. exposures Case-by-case basis; potential increases; may experience limited interest
IPOs and SPACs Case-by-case basis; potential increases; may experience limited interest
Challenged industries Case-by-case basis; potential increases; may experience limited interest

Broader market conditions have improved since the peak of the hard market in Q3 2020. Moderation has been significant and is expected to continue into 2023.

  • Impact of newer capacity
    • The influx of capacity into the market since late 2020 created competition and yielded rate deceleration throughout 2021. Throughout 2022, we have seen flattened-to-improved D&O premium outcomes.
    • Newer markets initially generated rate relief in the excess layers; however, as markets continue to seek growth, several carriers are providing alternative primary competition and leverage.
  • Economic uncertainty: Recovery from a lingering pandemic has yielded economic growth; however, D&O underwriters remain concerned with uncertainties that arise from global tensions and hostilities, inflation, supply chain issues, the scaling back of government subsidies and resulting challenges surrounding continued growth and insolvencies.
  • D&O underwriter focus: Carriers continue to scrutinize financial strength (especially liquidity); supply chain and customer demand; environmental, social and governance (ESG) practices; industry; claim history; regulatory uncertainty; loss-cost escalation; cyber and privacy; employee relations and retention; and systemic exposures.
  • Initial public offerings (IPOs) and special purpose acquisition companies (SPACs): Despite the decrease of IPO and SPAC IPO filings in the first half of 2022 (see Trends and Exposures section below), insurers remain focused on post-offering operational viability. Primary market conditions continue to be challenged for larger offerings, while conditions are improving for smaller offerings and those insureds remaining within the IPO liability window, as well as excess layers more broadly. Companies exiting IPO windows and with otherwise stable profiles may experience retention reductions and more significant decreases than the rest of the market.
  • Private and non-profit companies: The moderation of rate increases in 2021 has continued well into 2022. Yet a “tale of two markets” for many private and not-for-profit organizations creates contrasts in renewals for stable risk profiles and industries versus high-risk profiles and challenged industries.
    • Primary: Insureds with low and stable risk profiles are seeing enhanced competition, with a minimum of flat renewals and decreases when marketed. The market for high and/or distressed risk profiles remains challenging.
    • Excess: For larger risks, excess markets have recalibrated increased limit factors (ILFs).
    • Retentions: For challenged risks and those with large exposure increases, carriers continue to press for higher retentions. Even for smaller risks, minimum retentions are being scrutinized and regularly increased. Severity of increases most often depends on prior renewal increases and the need, if any, for continued correction.
    • Increased deployment: Carriers are willing to regularly deploy capacity for preferred risks. Additional capacity can be found for more risks than in recent quarters. This is having an impact on market conditions more broadly, especially for more desirable risks.
  • Side A: Competition among insurers for Side A business has been reinvigorated following a protracted period of rate adjustment. Competition is driven largely by newer market entrants.

Underwriting: D&O portfolio adjustments will continue into 2023.

  • We expect rates to continue deceleration into softer market conditions ahead.
  • Much of the current market competition is in the excess ABC layers, as reflected in more competitive ILFs.
  • Some buyers remain challenged, including:
    • Non-U.S. parent, U.S. exposures
    • IPOs and SPACs
    • Challenged industries, e.g., oil and gas, healthcare, life sciences, higher education, cryptocurrency, cannabis, retail (private), restaurants (private), sports/entertainment (private)
    • Liquidity challenged and pre-restructuring/bankruptcy risks

Several trends and exposures bear watching.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


D&O Liability Product Leader
FINEX North America

Management Liability Coverage Leader
FINEX North America

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