CS-8 - D&O Insurance - Navigating the Complexities

D&O insurers' results deteriorated slightly in 2022 after showing remarkable improvement in 2021. Recently, the rate environment has softened after multiple quarters of price increases caused sticker shock for corporations buying D&O insurance.

Although recent rate hikes have helped, the D&O market is still not completely out of the woods in terms of risks. New capital has entered the market in the form of managing general agents with clean balance sheets and solid underwriting experience, and corporations need to understand their risks and risk appetites, as well as look at their corporate strategies and the external environment as they estimate their willingness for deductibles, limits, etc.

Risks are getting elevated due to the recent banking collapse, exposure to cannabis, ESG, cyber issues, and continued social inflation. This session will examine sources of social inflation such as the rise in litigation, a broader interpretation of insurance contracts in favor of plaintiffs, larger punitive damages because of jury demographics, and growing negative sentiment toward corporations.

Finally, we will look at government initiatives such as the EU's General Data Protection Regulation and California's Consumer Privacy Act as they shift more responsibility for cyber breaches to companies' directors and officers.