The main sentiment being felt by buyers of professional and financial lines insurance is relief, as premiums that had skyrocketed in the past few years have begun to stabilise. This shift to a levelling out of premium rate rises follows a return to profitability for insurers after 2017, 2018 and 2019 were the worst underwriting years on record, forcing a rapid hardening across the insurance market.
However, significant risks remain for buyers of directors and officers' (D&O) insurance and professional indemnity (PI) insurance in the form of industry-wide threats from global political and economic volatility, along with regulatory risks.
In our Business Insurance & Risk Market Update H1 2023 report, we look at the contributing conditions and how the entry of new insurance providers may be influencing management liability risk management, including:
- premium rate rises are levelling out following a return to profitability for insurers, new competition and businesses buying less cover
- class actions have shifted to consumer or government agency claims and away from securities related claims, although several factors could lead to a reversal of this
- natural catastrophes, geopolitical events, inflation and volatility all present potential risks to the stabilised rating environment
- innovation is beginning to re-emerge in the D&O market with the release of the first new wording in years.
Other topics in the report include:
- placement ‒ premium increases have levelled out but risk selection is still critical
- claims ‒ a maze of obstacles and contradictions surround the claims environment
- cyber ‒ underwriters are focusing on risk management at executive level
- property ‒ rising property values create underinsurance headaches
- workplace risks ‒ psychological risks in the workplace are the new business focus
- construction ‒ liability concerns remain key for the construction sector.
Looking for business risk and insurance advice?
During this time of change you can turn to our Gallagher experts for advice and guidance. We are here for you and will do everything we can to help you face the future with confidence.