JUNE 18, 2020 02:18 PM (EDT)
AM Best: Directors and Officers Insurance Facing Seismic Shift (AM BestTV)
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OLDWICK - JUNE 18, 2020 02:18 PM (EDT)
In this episode of AMBestTV, Sridhar Manyem, director, and David Blades, associate director, both of AM Best, said the COVID-19 pandemic is accelerating pressures on directors and officers (D&O) insurance. Click on http://www.ambest.com/v.asp?v=dando620 to view the entire program.
Blades addressed how the COVID-19 pandemic is affecting the D&O segment.
“Similar to what has occurred with other lines of insurance coverage, the COVID-19 pandemic has led to a great deal of uncertainty and conjecture on the writers of D&O insurance,” said Blades. “For that reason, it is a definite level of anxiousness and uncertainty among those insurers. It is likely that the COVID-19 pandemic will ultimately lead to greater complexity regarding emerging D&O claims and litigation issues.”
Manyem highlighted how competitive the present market is, and whether there are concerns over inadequate pricing.
“At this particular juncture, I think insurers are definitely not trying to go headlong into the D&O market because there are plenty of risks,” said Manyem. “D&O insurers are definitely being very cautious in trying to make sure that the pricing is right, as well as pushing back on conditions. We could see more exclusions related to COVID-19 coming in the future. These are all factors that need to be considered in the supply-demand dynamic. The supply is going to be a little bit lower, and the demand is going to be higher, because there is going to be a lot more clients wanting D&O coverage in this elevated risk environment.”
To access the related market segment report, titled, “Expanding Risk Exposures Present D&O Insurers With Significant New Challenges,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=294657 .
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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.