San Francisco, CA - Over the last 11 years, Woodruff Sawyer’s annual D&O Looking Ahead Guide has been a trusted guide for clients, helping them make sense of the D&O market, including predicting pricing trends. This year, the Guide takes a hard look at the soft D&O premium market—including the factors driving it and what companies can expect moving forward.
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D&O pricing over the last five years has been a roller-coaster ride for companies, with dramatic price increases followed by dramatic price decreases in 2022 and so far in 2023. Driven in part by the unprecedented rise in traditional IPO, SPAC IPO, and de-SPAC filings in 2020–2021, median D&O premiums for public companies increased to 4.7 times what they were in 2018. To meet demand and because of the attractive rate environment, carriers injected large amounts of capital into the D&O market. Demand has since fallen off, however, as the number of initial public offerings declined dramatically. In the first half of 2023, 91% of Woodruff Sawyer’s public company D&O clients renewed with cost decreases, which are expected to extend into 2024.
Still, even though public companies are looking at D&O pricing that’s down up to 50% from last year, the cost is still up significantly compared to costs in 2018. So, what’s on the minds of carriers in this D&O premium market?
Woodruff Sawyer’s 7th Annual Underwriters Weigh In™ survey has the answer. D&O insurance underwriters from more than 40 different public D&O carriers shared their views on what keeps insurance underwriters up at night, including SEC rulemaking, historic security class action lawsuit settlement numbers, macro-economic factors, and perhaps most importantly, premium price volatility. As one underwriter puts it “if they [D&O premiums] fall further, we’re just going to see a more violent whipsaw back in a couple years as management at carriers demands remediation once again.”
Priya Huskins, Senior Vice President, Management Liability warns, “D&O pricing is cyclical, and it would be a mistake for public companies to assume prices will continue to go down forever. Companies may want to take advantage of the moment and right-size their insurance after underbuying during the hard market. When doing so, however, remember that it can be very uncomfortable for boards if companies change coverage year-over-year based only on pricing. Work closely with your broker to find out what’s appropriate for your company.”
About Woodruff Sawyer
As one of the largest independent insurance brokerage and consulting firms in the US, Woodruff Sawyer protects the people and assets of more than 4,000 companies. We provide expert counsel and fierce advocacy to protect clients against their most critical risks in property and casualty, management liability, cyber liability, employee benefits, and personal wealth management. An active partner of Assurex Global and International Benefits Network, we provide expertise and customized solutions where clients need it, with headquarters in San Francisco, offices throughout the US, and global reach on six continents. For more information, call 844.972.6326, or visit woodruffsawyer.com.
About Woodruff Sawyer
As one of the largest independent insurance brokerage and consulting firms in the US, Woodruff Sawyer protects the people and assets of more than 4,000 companies. We provide expert counsel and fierce advocacy to protect clients against their most critical risks in property & casualty, management liability, cyber liability, employee benefits, and personal wealth management. An active partner of Assurex Global and International Benefits Network, we provide expertise and customized solutions where clients need it, with headquarters in San Francisco, offices throughout the US, and global reach on six continents. For more information, call 844.972.6326, or visit woodruffsawyer.com.
