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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 13, 2019 01:47 PM (EST)
In this episode of AM BestTV, Sridhar Manyem, director, and David Blades, associate director, both in industry research with AM Best, said many insurers that offer directors and officers (D&O) coverage have been affected by unfavorable claims trends and inadequate pricing. Click on http://www.ambest.com/v.asp?v=dando219 to view the entire program.
Blades addressed how loss trends in the D&O business are evolving.
“The proliferation of different legal actions against corporate officers created a very challenging marketplace for the providers of D&O insurance,” said Blades. “Over the last few years what we have seen are direct loss costs and direct loss ratios increasing, as well as expenses for defense and cost containment. This has created a very challenging marketplace in terms of profitability for the writers of D&O insurance.”
He also said that, “The increasing propensity in general to litigate against corporate boards and the growing amount of funds flowing into shareholder activism, has also created an atmosphere of greater complexity. It has made it tougher for insurers in regards to providing D&O insurance.”
Manyem spoke about the risks connected with providing D&O insurance.
“In general, the risks related to D&Os are very complex. There are different types of covers. There are the risks that the insurers generally want to gravitate to, like the Side A covers that cover the D&Os, versus the slightly more risky Side B and Side C covers that require deep knowledge of the D&O market space. The terms and conditions of the D&O marketplace are really, really key in terms of determining what kind of claims can occur.”
To access a copy of this market segment report, titled, “Emerging Risks and Greater Complexity Challenge D&O Insurers,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=282401 .
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