Home Insurance Looking Ahead to 2024: A Guide for D&O Insurance Renewals [Report] | Woodruff Sawyer

Looking Ahead to 2024: A Guide for D&O Insurance Renewals [Report] | Woodruff Sawyer

by Cedric Guzman

The recently released report on D&O insurance pricing and coverage provides valuable insights into the current state of the market. In this article, we will highlight some key findings from the report and also encourage readers to access the comprehensive guide for more detailed information.

One of the major takeaways from the report is the favorable trend in D&O insurance pricing and coverage. In 2023, the majority of public companies experienced price cuts to their insurance programs, continuing a trend that started in 2022. An astounding 91% of Woodruff Sawyer public company clients saw a decrease in their D&O insurance costs during the first half of 2023.

The report highlights that IPO companies witnessed a median drop of 45% in D&O insurance pricing, while mature public companies enjoyed a 21% decrease during the 2022 to 2023 cycle. These reductions in pricing have made D&O insurance more affordable for organizations across the board.

Furthermore, the report reveals that 54% of public companies experienced a decrease in their self-insured retentions in the first half of 2023. This indicates that not only are companies benefiting from lower premiums, but they are also paying lower deductibles in the event of a claim.

What caused this welcome change in pricing? The report cites a reduction in demand, coupled with new insurance carriers entering the market, as the primary drivers. With fewer companies going public in 2022 and an increase in the supply of D&O insurance capital, the market shifted in favor of buyers.

Looking ahead to 2024, the report predicts that public companies will continue to benefit from a soft insurance market, where D&O insurance pricing remains relatively favorable. This outlook is supported by the results of Woodruff Sawyer’s annual survey, Underwriters Weigh In™, which gauges the sentiment of D&O insurance providers. According to the survey, 63% of underwriters expect rates to stay flat, while 30% anticipate further rate decreases. Additionally, 98% of underwriters expect self-insured retentions to remain the same or go down.

In addition to attractive pricing, the report highlights that insurance carriers are also competing with each other on coverage. This competition has led to broader coverage options for corporations. The guide provides more detailed information on this topic.

However, it is important to note that pricing cannot continue to decrease indefinitely. While the report suggests that public companies will continue to see savings in 2024, the savings are expected to be more modest compared to the significant price drops experienced in previous years.

The guide also explores several hot topics within the D&O insurance industry. It discusses recent developments in D&O litigation and governance, highlighting both positive and challenging aspects for directors and officers to consider.

In conclusion, the report’s findings indicate that D&O insurance pricing and coverage for public companies have been favorable in recent years. The combination of reduced demand and increased supply of insurance capital has led to lower prices and broader coverage options. Public companies can expect to see continued savings in 2024, although at a more moderate level. It is crucial for organizations to stay informed about these developments and make informed decisions regarding their D&O insurance coverage. Access the comprehensive guide for a more detailed analysis of the report’s findings.

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