TAMPA, Fla.--(BUSINESS WIRE)--BRP Group, Inc. (NASDAQ: BRP) (“BRP Group”), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial clients, today announced its second annual Directors and Officers (D&O) Benchmarking Report, revealing a steep decline in D&O insurance premiums in 2022, after several years of rate increases.
More than 350 public companies participated in this year’s survey, conducted in collaboration with Nasdaq, Inc. (“Nasdaq”). Participating companies provided key policy information regarding their D&O insurance coverage. One of the top findings reveals that after several years of significant increases in D&O insurance costs, businesses are now seeing a significant reduction in the premium and retention of their D&O coverage.
In fact, the Nasdaq-listed public companies that were surveyed, on average, saw their primary D&O insurance layer decrease by 20 percent in 2022. Recent IPOs or DeSPACs saw an average 28 percent rate decrease for their primary layer. Of all companies surveyed, recent Healthcare and Technology IPOs saw the largest decreases at over 30 percent.
One finding of note was that even in this environment of rate decreases, companies are opting for lower coverage amounts. The report found that 25 percent of companies decreased their overall limits, an increase from 2021 in which only 10 percent of companies decreased their overall limits.
“Benchmarking your limits and premium against your peers is very valuable information, especially in a time of significant rate changes,” said Mike Tomasulo, Senior Managing Partner and National Management Liability Practice Leader at BRP Group. “D&O insurance is a major budget item for public companies, especially during initial public offerings and DeSPAC transactions. As such, companies need independent limits, pricings and claims data along with a trusted advisor to help them manage these significant costs while also securing best-in-class coverage and protecting corporate directors and officers.”
Additional key findings from the report includes:
- The top three industries that continue to see the most securities claims and pay the highest rates were Healthcare, Technology and Consumer Discretionary
- On average, companies saw their total D&O insurance program costs decrease by 35 percent, driven by lower excess and A-Side rate
- Recent IPOs and DeSPACs saw their retentions drop by 40 percent
- More than 75 percent of companies surveyed saw their premiums remain flat or decrease
The report fully breaks down limits and purchasing data by industry, market capitalization and whether the company is a recent IPO or tenured public company. Additional data is also provided on the changes in rates since last year on excess and A-Side layers and identifies the most used primary carriers.
For a copy of the executive summary and information about obtaining the full report, please click here.
ABOUT BRP GROUP
BRP Group, Inc. (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.2 million clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent BRP Group’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or BRP Group’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements.
Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in BRP Group’s Annual Report on Form 10-K for the year ended December 31, 2022, and in BRP Group’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov, including those risks and other factors relevant to the business, financial condition and results of operations of BRP Group. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.
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The BRP Group Management Liability Practice and Nasdaq worked together for the second year in the row, to produce the D&O Benchmarking Report. Our process involved crafting a survey that was distributed to Nasdaq listed companies, which was designed to gather crucial information on their director’s and officer's insurance. After receiving more than 350 completed responses, we thoroughly analyzed the data and utilized it to produce a comprehensive final report.