San Francisco, CA – For the past 12 years, Woodruff Sawyer’s annual D&O Looking Ahead Guide has been a reliable resource for clients, providing valuable insights into the D&O market and forecasting pricing trends. Additionally, our Underwriters Weigh In™ survey has consistently predicted much of the market’s volatility and shifts, and this year is no different.
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Over the last five years, D&O pricing has been marked with sharp fluctuations—soaring rates followed by steep declines in 2022 and 2023. As we move into the fall, the market is undergoing a shift, with premium reductions beginning to slow. Among Woodruff Sawyer’s clients, 83% of public companies benefited from premium relief, but for the first time in 18 months, the number of renewals showing increases or remaining flat has risen.
Looking ahead to 2025, we expect to see emerging carriers taking on more risk to grow their market share, while established players will seek to defend their position, all while keeping a close watch on claims trends.
Securities Class Action, Derivative Lawsuits, and Large Settlements
In 2024, securities class action filings are up 17%, with 147 cases through August 2024, putting the year on track for over 200 filings—the highest since 2020. Settlements have reached $2.7 billion in just eight months, matching 2023’s record pace. With fewer IPOs and de-SPACs, suits now target larger, established companies, resulting in longer cases and higher settlements.
Meanwhile, derivative lawsuits, especially fiduciary duty breaches, are gaining traction in the Delaware Chancery Court, leading to significant settlements, such as Wells Fargo’s $240 million and Boeing’s $237.5 million. As plaintiffs push for larger fees—Dell’s attorneys secured 26.67% of a $1 billion settlement—the importance of robust D&O insurance, particularly "Side A" coverage, becomes more evident for corporations incorporated in states like Delaware, New York, and California since these companies cannot pay for these settlements themselves.
Priya Huskins, Senior Vice President, Management Liability adds, “A decade ago, carriers were practically giving away stand-alone Side A insurance, viewing the risk of significant derivative lawsuits with large settlements as minimal. Corporations had the same view and were thus not overly concerned about this exposure. Today, not considering this exposure would be a serious oversight. Insurance underwriters are also feeling the pain, with 68% of those surveyed saying they are more concerned about evolving derivative settlement costs than economic forces. Given escalating defense costs, rising numbers of claims, and substantial settlements, especially in derivative and securities class actions, it is crucial to work closely with your broker to ensure your D&O program is muscular enough to shield your individual directors and officers as well as your company’s balance sheet officers.”
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.
