OLDWICK, N.J.--(BUSINESS WIRE)--In this AMBestTV episode, Sridhar Manyem, director of industry research and analytics, and Sam Hanig, senior industry analyst, both of AM Best, said insurers that offer directors and officers (D&O) coverage face a widening array of developing issues, including cyber-related exposures. Click on http://www.ambest.com/v.asp?v=dand0619 to view the entire program.
The D&O insurance segment's performance improved in 2018. Manyem highlighted what drove the improved performance of the sector.
“I would characterize the 2018 results as better than 2017, but it is still troublesome,” said Manyem. “The direct loss ratio has seen a three- to four-point improvement over the past two years, but it is still well above the historic average. What drove the small improvement in the loss ratios was a slight decrease in the number of securities class action suits, as well as improvement in the rate environment and some underwriting actions carriers have taken to increase self-insured retentions.”
Hanig discussed whether D&O insurers are getting appropriate rates in relation to the risks they are underwriting.
“In general, insurers have recognized the need for rate increases, recently. In particular, they took materially more rates in 2018 compared with 2017,” said Hanig. “Whether that's going to be adequate for the future environment is going to be difficult to predict, but the D&O writers are recognizing that they have rate needs and are taking action.”
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