D&O Insurance Market Stabilizes as Premiums Moderate After 2022 Surge
Event summary
- 54% of companies saw D&O premiums remain within ±10% year-over-year, 30% experienced moderate decreases of 10–30%, and 10% saw reductions greater than 30%.
- Healthcare and technology sectors continue to command the highest premiums due to elevated litigation risk.
- Average total D&O limits increased to $66 million, reflecting improved pricing and larger-cap buyers.
- IPO and de-SPAC activity in the $250M to $1B market cap range is expected to shape future D&O pricing dynamics.
The big picture
The D&O insurance market is transitioning to a more balanced environment after record-high premiums in 2022. While competition among insurers persists, primary carriers are adopting a more disciplined approach to premium and retention decreases. The market's stabilization is not uniform, with healthcare and technology sectors facing higher premiums due to litigation risks, while materials, consumer discretionary, and industrial sectors see sharper premium decreases. Future market dynamics may be closely tied to broader capital markets activity, particularly IPO and de-SPAC trends.
What we're watching
- IPO Activity
- How the recovery in IPO activity will reintroduce demand into the D&O market, particularly among growth-stage companies.
- Sector Divergence
- Whether the pronounced industry-level differences in D&O premiums will persist or converge over time.
- Risk Transfer Strategies
- The pace at which companies adjust their D&O limits and risk transfer strategies in response to the improved pricing environment.
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