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Member, Beacon International Group, Ltd.
The recovering stock market helped directors and officers liability insurance pricing fall 2.7% on average during the third quarter of 2009 compared with the same quarter in 2008, Aon Corp. reported Friday.
D&O prices for financial industry companies, which saw double-digit increases during each of the previous four quarters, increased by only 3.2% during the third quarter, according to Aon's “Q3 Quarterly D&O Pricing Index.”
Other industry sectors saw average price decreases of 4.9% in the third quarter.
A slowdown in claims against financial companies came after stock market recovery, Aon said. Claimants filed 130 federal class action lawsuits—including 49 related to the credit crisis—in the first three quarters of 2009. In contrast, they filed 163 securities class action lawsuits during the same period of 2008.
“The decreasing number of claims may signal an end to the litigation explosion for financial services firms,” Mike Rice, national practice leader of Aon's financial services group and author of the index, said in the report.
“In 2010, we expect the market for D&O coverage to continue to soften for financial institutions as well as most of the other industry sectors,” he said.
The report is available at aon.mediaroom.com.