Business Insurance: The rates for directors and officers liability insurance (D&O) have stabilised for most corporate clients as the hard market conditions continue to ease, says the New Zealand insurance broker, Crombie Lockwood.
In a market update, Crombie Lockwood says that recent legislative changes in Australia and an influx of capacity into the London D&O insurance market have contributed to the softer market, which has put pressure on the New Zealand market to reduce pricing.
This is particularly the case in excess layer placements or ‘top up’ cover. However commercial and SME clients are likely to face inflationary premium increases.
While the D&O market has softened somewhat, the global economic and geopolitical landscapes continue to remain challenging, with higher global interest rates, inflationary pressures, the impact of the Ukraine conflict and supply chain interruptions.
The combination of these factors, together with the protracted nature of D&O liability and other financial lines claims and the anticipated legislative changes following the conclusion of the Law Commission’s investigation into Class Actions and Litigation funds, could all negatively impact the market and pricing going forward.
While the hard markets of 2020/2021 are firmly behind New Zealand for most D&O liability risks, clients should continue to demonstrate their financial viability to insurers and importantly, show how they are addressing cyber and data security, environmental, social and governance (ESG), supply chain and business continuity, suggests Crombie Lockwood.
The uplift in event-driven D&O claims globally (including data breaches and greenwashing) means insurers now expect more from directors’ risk management approach to their company’s overall operational resilience. Business insurance are also showing a heightened awareness of these risks.
Risk management is now as important as a company’s financial position when it comes to underwriting criteria, which had not previously been the case.
Comments
Post a Comment