Directors and officers liability insurance rates continued to rise at July 1 but in smaller increments than in recent renewals, and many experts believe rates may be flat by this time next year.
New capacity entering the D&O sector has relieved some of the upward pressure on rates, although for now it is focused on excess layers, experts say.
Problematic areas in the D&O sector include coverage for “de-SPAC” transactions, when there is a merger between a private operating company and a publicly traded special purpose acquisition vehicle, and fiduciary litigation associated with alleged high fees.
“The entire broker market saw rate increases for almost every single one of their clients” last year, with the market peaking in the second quarter of 2020, said Seth Pfalzer, senior vice president and partner at Woodruff Sawyer & Co. in San Francisco.
The worst of the hard market may be over, said John