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CAC Specialty’s D&O Webinar: Key Takeaways

Mar 30, 2020

CAC Specialty’s D&O Market Update:

On Friday, March 27, CAC Specialty hosted the first of two D&O Market Updates with some of the most senior underwriters in the industry. We were thrilled to have the following participants on our panel:

AIG: Brady Head

Arch: John Rafferty

AXA/XL: Jim Koval

Everest: Mike Karmilowicz

Sompo: Ray Santiago

Here are some key takeaways from the panel’s discussion:

Is it all about the price?…

  • Before the COVID-19 pandemic hit, the message to clients was that insurers were demanding (and getting) rate on their D&O renewals.
  • According to one insurer, rates for publicly traded non-FI accounts were up 40% in the first two months of 2020.
  • Some insurers believe that excess rates are still too low and require additional adjustment.
  • The pandemic and its fallout will couple with the already record number of securities class actions filed and insurers’ dreary loss picks to push rates even higher.
  • Financial institutions books of business are not experiencing as drastic of rate increases as the insurers’ commercial books of business; these books were presumably priced higher to begin with.

Other things to consider..

  • Insurers continue to focus on other ways to profitably underwrite D&O risks including increased retentions, cautious limits management, smart attachment points and wise risk selection.
  • Continued differentiation of best-in-class risks in industries less impacted by claims is important.
  • Reinsurance pricing is going up, and reinsurers are especially concerned about their cedants who have primarily excess books of business.
  • Private equity continues to stand out as tough write.
  • The recent Delaware Supreme Court decision in Salzberg v. Sciabacucchi is a good thing, and over time it may help moderate the IPO market.

Looking ahead…

  • This market will continue to harden, and insureds can expect insurers to push rate (and use the other tools available to them) for the next 12 to 24 months.

CAC Will host a 2nd D&O Market Panel discussion on,, Friday 4/3, which will include key leadership from Berkley Pro, Berkshire Hathaway, Chubb, CNA and Tokio Marine HCC.

In other news,

The Market:

The DJIA opened at 21,636.78.

No Wimbledon This Year

As sporting and other events are cancelled or postponed, questions about insurance coverage abound. According to media reports, financial losses stemming from the cancellation of the Wimbledon tennis tournament will be covered under a global pandemic insurance program purchased by the All England Club (the entity putting on the tournament). Thought for a Monday…does it follow that events that are cancelled probably have some type of insurance backstop while events that are postponed have either no pandemic-related insurance or insufficient insurance coverage?

In non-COVID 19 News…

On Friday, BP agreed to draft a shareholder resolution designed to address the role it intends to play in addressing the climate change crises. The resolution will help solidify the promises BP made in February to be carbon neutral by 2050. BP joined other energy companies who have made similar pledges as a result of increasing pressure from their shareholders, including large asset managers, to limit their exposure to carbon emitting fossil fuels.



Anna Sagar, Wimbledon cancellation covered by pandemic insurance: report, Insurance Insider, March 30, 2020

Dieter Holder, BP Agrees to Draft Climate Change Shareholder Resolution, WSJ, March 27, 2020

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