Directors and officers insurance rates up 4.5% in 2012 third quarter
Reprints
Primary pricing for directors and officers liability insurance increased 4.5% for the third quarter of 2012 compared with the same quarter a year ago, although premiums are flat overall because of still-declining excess insurance rates, Aon P.L.C.’s financial services group said in a report issued this week.
The 4.5% primary increase compares with a 2.1% increase reported for the second quarter of 2012, Aon said in its report.
The report says rate hikes for primary pricing began to increase in April.
“That being said, we continue to see a separation between primary and excess rates,” the report stated.
“Primary rates are now trending upward, but most clients’ total D&O premiums are still flat overall because excess rates are still declining, albeit at slower rate of descent,” said the report, echoing its second-quarter findings.
Overall in the third quarter, the average price for $1 million in coverage limits decreased 8.8% from the second quarter of 2012, according to the report.
“As we have said in the past, a more meaningful measure derived from this index is to compare the current quarter with the prior-year quarter, which for Q3 2012 represents a decrease of 1.2% over Q3 2011.
“Since D&O polices are typically written for a 12-month period, this year-over-year comparison is a close approximation of renewal pricing and a more significant indictor of renewal results in the quarter,” said the report.
Aon’s “Quarterly D&O Pricing Index, Third Quarter 2012,” is available here.
Read Next
-
Average insurance rates still on the rise: Marsh
Global insurance rates continued to harden during the fourth quarter, but rates increased at a slower pace than the third quarter, Marsh Inc. said Wednesday.
