According to an article by Jordan Kurkowski, vice president of professional lines at AmWins, markets for directors and officers liability insurance are now increasing prices for most risks by 5 to 10%. The only exceptions are IPOs and Special Purpose Acquisition Companies (SPAC).
Concerns about bankruptcies and security claims arising from COVID-19 have not materialized, and the impact of inflation is still unknown. Underwriters are focusing on the following factors:
- The regulatory environment - the SEC, Department of Justice and legislators will be addressing private equity and hedge funds fees; corporate crime; fraud; and board diversity.
- Cybersecurity controls and data breach disclosures.
- Employment practices - compliance with anti-discrimination laws, sexual harassment policies, cover ups of wrongdoing, failure to insure employee security during the pandemic.
- Fluctuations or variations in financials.
- Change in leadership.
- Mass layoffs, closing locations, or loss of clients.
- Pending sale, merger or acquisition.
Summing up, underwriters are looking at individual risk factors.
The article is at https://www.amwins.com/resources-insights/article/market-factors-not-the-only-driver-for-d-o-policy-pricing.