Fitch publishes directors and officers liability insurance dashboard

Fitch Ratings has announced the availability of a new Dashboard Report that discusses pricing trends, market dynamics and key drivers of recent results in the property and casualty directors and officers (D&O) liability insurance market in the United States.

Results in the D&O insurance market were largely stable in 2013, the dashboard indicates. Relatively steady claims trends contributed to underwriting performance in which direct loss ratio for D&O liability insurance rose slightly to 49.8% from 48.2% in prior year, notes a statement issued late last week by Fitch Ratings.

D&O is a relatively concentrated insurance market segment, with the 10 largest U.S. writers accounting for nearly 70% of industry direct premiums.

Fitch reports that statutory data for Other Liability – Claims Made (OLCM) business is a reasonable proxy for the D&O insurance segment, adding that OLCM loss reserves developed favourably in each of the last five years, buoyed by strong results from hard market years (2004 to 2007).

“Recent accident years have developed moderately unfavourably, but fears of larger losses emerging from the past economic recession and financial market disruption has not materialized,” the statement continues.

Pricing momentum in D&O insurance is fading, Fitch notes, citing a Willis North America report that suggests public company D&O prices appear to be flattening on primary layers, while declining for excess and Side A coverage. Pricing is firmer for private companies and not-for-profit entities.