State of the Insurance Market Report
2024 Initial Outlook:
Management Liability Insurance
Litigation against corporate leaders is rising, driving greater demand for strong Directors and Officers (D&O) coverage. Businesses and executives need more comprehensive protection now due to:
- Regulatory scrutiny
- Shareholder activism
- Emerging risks like cyber incidents
- Intensified environmental issues
- Increased bankruptcy filings
- Banking Industry turbulence
Additionally, the Securities and Exchange Commission (SEC) is introducing new regulations affecting the financial market. The commission is focusing particularly on directors and officers and the management of large debt, which could lead to bankruptcies that might impact local and global market volatility.
Although we are in a soft market, increased class-action lawsuits and larger claim settlements are increasing claims frequency and severity. As a result, underwriting standards have tightened in particular cases, leading to higher premium rates for higher-risk companies.
Coverage Considerations
The management liability insurance market remains soft coming out of a hard market phase, with rates projected to remain steady through early 2024. It is a favorable period for coverage renewal or purchase.
In 2024, pay special attention to new SEC regulations. These will affect both management liability and cyber insurance. By focusing on compliance, you’ll avoid legal and financial ramifications.
The government has also increased its focus on environmental, social, and governance (ESG) practices. Insurers are scrutinizing companies' risk management practices and governance structures more closely before extending coverage. Review policies, identify conflicts of interest, and ensure transparent disclosure to stay abreast of regulatory challenges.
Business leaders need to monitor the fast-changing landscape of cryptocurrency and digital assets. Regularly evaluate these assets through the lens of both cyber and management liability — especially when engaging with third-party providers.
Rate Forecast |
||
| Private Company: Primary: |  |
-5% to -15% |
| Private Company - Excess: | |
-10% to -30% |
| Public Company - Primary: | |
-10% to Flat |
| Public Company - Excess: | |
-10% to -30% |
| Financial Institutions - Primary: | |
-5% to Flat |
| Financial Institutions - Excess: | |
-5% to -15% |
| Employment Practices - Primary: | |
-10% to Flat |
| Employment Practices - Excess: | |
-10% to -20% |
| Fiduciary Liability - Primary: | |
-10% to Flat |
| Fiduciary Liability - Excess: | |
-10% to -20% |
