Directors and officers liability rates fall in second quarter
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Risk-adjusted primary directors and officers liability rates for publicly traded companies that renewed in this year's second quarter fell an average of 0.97%, with a median decrease of 4.43%, said Marsh Inc. in a report issued Wednesday.
On average, risk-adjusted total program rates were down 3%, with a median decrease of 8.93%, according to the report, which is dated Sept. 24.
“Under a traditional analysis — without modification for changes to risk profiles that are key to a risk-adjusted view — average primary D&O rates increased 4.9%, with a median increase of 5%. Total program rates increased an average of 1.8%, with a median increase of 1.5%,” said the report.
The report states although primary rates continue to firm on a traditional rate comparison basis, the excess market remains competitive, with recently expanded capacity, which offset the primary and lower layer program increases during the quarter.
The report said areas of concern for underwriters include merger objection claims, market capitalization growth and corporate governance, with merger objection claims and litigation a particular issue for small to midsize companies.
Copies of the report, “Risk- Adjusted Benchmarking: D&O Rates Fall in Second Quarter,” are available here.
Last week, Aon Risk Solutions said in a report that D&O liability insurance remained flat during the second quarter of 2013, and the outlook is for more of the same.
