AM Best, a credit rating agency and provider of financial data and analysis for the insurance industry, reports that insurers offering directors and officers (D&O) liability coverage in the US recorded their most favourable loss experience in more than ten years during 2024, despite declining premium volumes and ongoing underwriting challenges.<\/p>\n
![\"am-best-logo\"](\"http:\/\/calebdewey.com\/wp-content\/uploads\/2025\/05\/am-best-logo.png\"){kind=logo}
The report highlights that significant reserve releases from prior accident years, particularly those during the height of the hard market, contributed to the strongest quarterly results seen in the past seven years. These reserve adjustments also reinforced the overall year-end 2024 results.<\/p>\n
However, AM Best\u2019s Market Segment Report, titled \u201cChanging Environment Brings New Risks to D&O Insurers,\u201d warns that insurers still face ongoing challenges from unresolved claims originating in the softer market years between 2016 and 2019. These legacy claims worsened during 2024 and may continue to exert pressure going forward.<\/p>\n
Furthermore, AM Best draws attention to the growing risk exposures related to artificial intelligence, which are expected to present additional challenges for D&O underwriters in the near future.<\/p>\n
The analysis is based on data from the monoline D&O liability supplement contained within the annual statement filings of US insurers.<\/p>\n
AM Best notes that the direct loss ratio for monoline D&O liability has improved by over 10 percentage points since its peak of 62.4% in 2017 and 2018.<\/p>\n This improvement is attributed to the substantial rate increases, enhanced pricing, and more prudent underwriting standards implemented during the market corrections of 2020 and 2021, which transformed the dynamics of the D&O insurance sector.<\/p>\n As we move into the second half of 2025, AM Best reports growing apprehension among market participants regarding the sustainability of recent premium reductions, which have contributed to a decline in direct premiums written (DPW) for D&O liability over the past three years.<\/p>\n The report emphasises that corporate executives continue to face a complex array of risks, including macroeconomic uncertainty, a shifting legal environment, and evolving cyber threats, which complicate the risk profile for D&O insurers.<\/p>\n In 2024, total industry premiums for D&O liability fell by 6.0% compared to the previous year, with most of the reduction occurring in the first quarter. The $2.2 billion premium recorded in Q1 2024 was the lowest quarterly figure in four years.<\/p>\n However, premiums steadily increased throughout the remainder of the year. The rise in premiums during the final quarter, combined with the impact of reserve releases, resulted in a notable reduction in the loss ratio for the full year.<\/p>\n Despite these pressures, AM Best concludes that the D&O insurance segment remains robust, supported by improved underwriting outcomes and disciplined risk management. Nevertheless, the insurer community must remain vigilant as emerging risks and legacy claims continue to pose challenges throughout 2025 and beyond.<\/p>\n \u201cMarket uncertainty, evolving technology, corporate disclosure related issues, and potential macroeconomic strife stemming from new tariffs are among the factors affecting D&O segment,\u201d said David Blades, Associate Director, Industry Research and Analytics, AM Best. \u201cCorporate executives continue to face a variety of challenges in managing complex risks amid rising uncertainty.\u201d<\/p>\n \u201cThe loss ratio for the fourth quarter of 2024 was the lowest quarterly loss ratio of the past seven years by a wide margin, seven points better than for any other quarter,\u201d added Christopher Graham, Senior Industry Research Analyst, AM Best.<\/p>\n \u201cAt the same time, continued profitable results could lead to sustained pressure on pricing if insurers have little reason to raise rates and risk losing profitable business.\u201d<\/p>\n The post D&O insurance sees strongest loss performance in over a decade despite premium decline<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" AM Best, a credit rating agency and provider of financial data and analysis for the insurance industry, reports that insurers offering directors and officers (D&O) liability coverage in the US recorded their most favourable loss experience in more than ten years during 2024, despite declining premium volumes and ongoing underwriting challenges. The report highlights that […]<\/p>\n","protected":false},"author":1,"featured_media":4136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"_links":{"self":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/4592"}],"collection":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/comments?post=4592"}],"version-history":[{"count":3,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/4592\/revisions"}],"predecessor-version":[{"id":4595,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/4592\/revisions\/4595"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media\/4136"}],"wp:attachment":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media?parent=4592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/categories?post=4592"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/tags?post=4592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Download](\"http:\/\/calebdewey.com\/wp-content\/uploads\/2025\/05\/catastrophe-bond-ils-market-report-q1-2025-728x90-2.png\")
<\/a><\/p>\n<\/div>\n<\/div>\n