Press Release - JUNE 11, 2019

AM BestTV: New Court Venues, Litigation Funding and #MeToo Impacting D&O Market, Say AM Best Analysts

 Lee McDonald
Group Vice President, Publication and News Services
+1 908 439 2200, ext. 5561


OLDWICK - JUNE 11, 2019
In this AMBestTV episode, Sridhar Manyem, director of industry research and analytics, and Sam Hanig, senior industry analyst, both of AM Best, said insurers that offer directors and officers (D&O) coverage face a widening array of developing issues, including cyber-related exposures. Click on to view the entire program.

The D&O insurance segment’s performance improved in 2018. Manyem highlighted what drove the improved performance of the sector.

“I would characterize the 2018 results as better than 2017, but it is still troublesome,” said Manyem. “The direct loss ratio has seen a three- to four-point improvement over the past two years, but it is still well above the historic average. What drove the small improvement in the loss ratios was a slight decrease in the number of securities class action suits, as well as improvement in the rate environment and some underwriting actions carriers have taken to increase self-insured retentions.”

Hanig discussed whether D&O insurers are getting appropriate rates in relation to the risks they are underwriting.

“In general, insurers have recognized the need for rate increases, recently. In particular, they took materially more rates in 2018 compared with 2017,” said Hanig. “Whether that’s going to be adequate for the future environment is going to be difficult to predict, but the D&O writers are recognizing that they have rate needs and are taking action.”

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  • Rated Companies Should Prep for Possible TRIPRA Shutdown, Says AM Best Senior Analyst: Edward Zonenberg, senior financial analyst, AM Best, said uncertainty on the Terrorism Risk Insurance Program Reauthorization Act should motivate insurers to address coverage needs in the event the U.S. Congress fails to renew the program by the end of 2020: .

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