The directors and officers liability market is firming, most notably with 41% of private and nonprofit organizations having experienced a premium increase last year, said New York-based Towers Watson & Co. in a survey released Thursday.
Towers Watson conducted its online survey of 325 organizations, most of whom held total assets and/or revenues of more than $1 billion, from Oct. 23 through Dec. 7, 2012.
Among other survey results:
• In 2012, directors and officers, particularly among private companies, were more likely to ask about the amount and scope of D&O coverage.
• Regulatory claims continue to be a significant source of concern, with 83% of respondents ranking this area in the top three overall.
• Purchasing patterns for dedicated Side A policies among private companies continue to increase, with 41% including a Side A layer as part of their D&O program, an increase from 34% in 2011.
• Breadth of coverage was considered the most important attribute of a primary D&O policy, while financial strength ranked as most important when considering an excess insurer.
• A total of 63% of nonprofit respondents reported having a claim within the last 10 years.
• A total of 21% of respondents are dissatisfied with the manner in which their D&O claim was handled.
"Directors and officers, and their respective organizations, continue to be susceptible to a much wider range of claimants than in years past," Larry Racioppo, vice president in Towers Watson's executive liability group and author of the survey, said in a statement. "Increasing claim activity, including D&O and employment litigation, coupled with inadequate pricing and retentions in the private and nonprofit space, are all driving insurers' need for pricing increases."
Copies of the survey are available here.
New York-based Marsh Inc. said in a report issued in February that primary D&O insurance rates increased 4.1% in last year's fourth quarter.
Source: Business Insurance - USA