D&O rates continue to decline
Financial and professional lines rates decreased 3%.
- Directors and officers (D&O) liability rates continued to decline, though the pace of decreases moderated to 5% compared to 8% in the prior quarter.
- Many insurers sought to move off of high excess D&O layers in favor of side A or lower layers, such as primary and first excess.
- Competition for new business from new market entrants and legacy insurers generally persisted.
- Insurers typically sought to expand D&O participation with insureds by managing their overall relationships across product lines.
- Fiduciary insurance rates were flat.
- Insurers continued to monitor and react to lawsuits that seek to apply the liability theories used in Employee Retirement Income Security Act (ERISA) excessive fee litigation to lawsuits involving health plans/pharmacy benefits managers (PBMs).
- Litigation related to pension risk transfer has increased underwriting focus on defined benefit plans.
- Both errors and omissions (E&O) and financial institution (FI) insurance rates increased slightly.
Cyber rates decrease for fifth consecutive quarter
Cyber insurance rates decreased 5%.
- Capacity was available for both primary and excess programs.
- Some insureds with strong cybersecurity measures used premium savings to purchase greater limits and reduce self-insured retentions (SIRs).
- Marsh 2023 claims data showed that nearly one-fifth of clients purchasing cyber insurance reported a claim. It generally takes 18 to 36 months to close a claim, meaning many 2023 claims are still developing.
- (Re)insurers remain concerned with and are trying to better quantify single points of failure and third-party cyber risks.
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