D&O rates continue to decline
Financial and professional lines rates decreased 6%.
- Directors and officers (D&O) liability insurance for publicly traded companies declined 8%; insurer competition remained strong.
- The size of rate decline eased, especially for programs that had received large decreases previously.
- Many insurers continue to evaluate their placement in excess towers, with some seeking to move out of higher layers.
- Fiduciary rates increased 2% as Employee Retirement Security Act (ERISA) 401k plan excessive fee litigation continued to drive losses.
- New insurers offered lower retentions, on some programs.
- Errors and omissions (E&O) rates were flat.
- Financial institutions (FIs) rates decreased 5%.
Cyber rates decline; ransomware attacks increase
Cyber insurance rates decreased 4% in the quarter.
- Ransomware attacks increased in frequency, sophistication, and severity; evolving privacy regulations also led to increased claims.
- Capacity was available, especially for excess programs; managing general agents (MGAs) continued to bring new capacity into the market.
- Catastrophic cyber risk is a significant concern for insurers and insureds; understanding and quantifying exposure to war and aggregated cyber incidents, together with the supply chain risks associated with each, is challenging, but essential.