Woodruff Sawyer’s 11th annual D&O Looking Ahead Guide features proprietary research and expert insights to help guide your 2024 directors and officers (D&O) liability insurance program renewal.
In this article, we’ll feature highlights from the newly released report on D&O insurance pricing and coverage—and there’s so much more available to you when you access the Guide below.
For a more in-depth discussion about the topics in the report, be sure to join us on September 26 at 10am PT for our Looking Ahead webinar. Otherwise, read on for a summary of some of the findings.
Favorable D&O Insurance Pricing and Coverage Continues
In 2023, most public companies continued to enjoy price cuts to their D&O insurance program—a trend that started in 2022. In fact, 91% of Woodruff Sawyer public company clients experienced a decrease in their D&O insurance costs in the first half of 2023.
The median drop in D&O insurance pricing was 45% for IPO companies and 21% for mature public companies during the 2022 to 2023 cycle.
Median Cost Change Trend for New Public and Mature Public Companies*
Source: Woodruff Sawyer Annual Client Renewals
*Companies that have been public for 5+ years
In addition, we saw 54% of public companies experience a decrease in their self-insured retentions in the first half of 2023.
Public D&O Annual Renewal Results for Retention Changes Over 5 Years*
*Data shows percentage of clients who experienced flat or change in retention and does not indicate percentage retention increase or decrease.
Source: Woodruff Sawyer Program Renewal Analysis
What started this welcome change in pricing? A number of factors, not the least of which was a sharp decline in the number of companies going public in 2022 coupled with new insurance carriers entering the market.
The combination of a reduction in demand and an increase in the supply of D&O insurance capital is the classic Economics 101 recipe for lower pricing.
Looking to 2024, we expect public companies will continue to take advantage of a soft insurance market where D&O insurance pricing will be comparatively favorable.
The Woodruff Sawyer house view is supported by the results of our annual survey, Underwriters Weigh In™ (see the Guide for more results). This survey is an important expression of the sentiment of D&O insurance providers.
In this year’s survey, 63% of D&O insurance underwriters predict that rates will stay flat. Another 30% of underwriters expect rates will continue to fall.
Moreover, when it comes to self-insured retentions (SIRs), 98% of underwriters also expect SIRs to stay the same or go down.
It’s not just pricing that’s making D&O insurance for public companies more attractive these days. Carriers are also competing with one another on coverage. This translates to broader coverage for corporations. This is a topic we cover in more detail in the Guide.
But note: Pricing cannot keep going down forever. On that point, we believe that public companies will continue to see savings in 2024—but more modest savings compared to the huge price drops experienced from the second half of 2022 and 2023.
It’s also worth considering the issues in the Guide’s Hot Topics section. There are several pieces of good news when it comes to recent D&O litigation and governance developments that will fill the cup of all the optimists out there. However, there are plenty of issues for directors and officers to ponder as well.
Access the Guide for More
Woodruff Sawyer’s D&O Looking Ahead Guide, 2024 covers pricing trends and much more, including:
- D&O insurance market updates
- Hot topics for directors and officers
- The results of our Underwriters Weigh In survey
- Expert insights from Woodruff Sawyer’s executive team
- A further look at what to expect in 2024
Get instant access to the full interactive Guide below or download the PDF.
Woodruff Whiteboard Breakdowns: D&O Tail Policies
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