AM BestTV: Directors and Officers Buffeted by Litigation, #MeToo Movement, Complex Risks, Say AM Best Analysts

OLDWICK, N.J.–(BUSINESS WIRE)–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.

Recent episodes of AM BestTV include:

  • Expanding Scope of D&O Risks Requires Domain Expertise, Says AM
    Best Director
    : Sridhar Manyem, director of research, AM Best, said
    various forces are increasing the complexity of risks facing directors
    and officers, requiring insurers to become more knowledgeable about
    the unique risks of the industries they cover: http://www.ambest.com/v.asp?v=manyem219.
  • Insurers Say D&O Risks Are Multiplying, Rates Are Not:
    Attendees to the PLUS D&O Symposium said directors’ and officers’
    exposures are complex and numerous, with insurers struggling to
    identify the next risks and obtain appropriate pricing: http://www.ambest.com/v.asp?v=plusdando1219.
  • Larger, Diversified EMEA-Based Insurers Show Better Results, Says
    AM Best Senior Director
    : Mahesh Mistry, senior director of
    analytics, AM Best, said insurers in emerging markets of Europe,
    Middle East and Africa (EMEA) experienced greater financial volatility
    in 2018, but that the more well-diversified companies produced
    stronger earnings: http://www.ambest.com/v.asp?v=emea119.
  • UAE Insurers Struggle to Keep Receivables Current, Says AM Best
    Associate Director
    : Salman Siddiqui, associate director,
    analytics, AM Best, said typically longer debt repayment periods in
    the United Arab Emirates mean insurers there face obstacles in
    maintaining and reporting accurate financial results: http://www.ambest.com/v.asp?v=uae119.

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. Visit www.ambest.com
for more information
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Contacts

Lee McDonald
Group Vice President, Publication and News
Services

+1 908 439 2200, ext. 5561
lee.mcdonald@ambest.com

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