ACE Ups D&O, E&S Capacity To $50M; Navigators Offers $25M

Navigators followed suit a few days later, offering $25 million in D&O limits.

On Sept. 19, Philadelphia-based ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, announced the increases for management and professional liability, as well as for commercial umbrella and excess casualty and medical professional lines of business.

John Lupica, president and chief executive officer, said in a statement, "ACE USA is pleased to offer additional capacity for these critical coverages given heightened need and uncertainty in the marketplace."

He added, "The long-tail nature of these liabilities underscores the importance of partnering with a financially strong insurer."

ACE USA is rated "A-plus" by A.M. Best.

On Sept. 15, the Oldwick, N.J.-based rating agency downgraded the ratings of AIG's property-casualty subsidiaries to "A" from "A-plus" and reaffirmed the decision on Sept. 18 after an $85 billion federal government credit facility easing holding company liquidity issues had been announced.

A chart showing comparative A.M. Best ratings and 2007 direct premium market shares for the top 25 writers of liability on a claims-made basis–a category that includes management and professional liability lines–is linked to this article.

According to the comparison, ACE's U.S. operations, which are among eight listed organizations with ratings of "A-plus" or better, ranked in seventh place with 4 percent of the U.S. market for these liability lines.

AIG, now an "A"-rated property-casualty insurance group, held the lead spot in 2007, with more than 22 percent of the U.S. market for these lines.

Mr. Lupica said ACE's capacity enhancements "are consistent with our focus to be a nimble and responsive partner in addressing the needs of our clients."

The statement highlighted ACE's "strong balance sheet, coupled with its global network and seamless worldwide service capabilities" as key differentiators in "minimizing bottom-line impacts and protecting companies of all sizes from large- scale liabilities."

On Sept. 23, New York-based Navigators Group said it would respond to the call for increased D&O capacity, announcing that its principal underwriting agency subsidiary, Navigators Management Company, would increase its D&O liability insurance capacity.

"The request of our D&O policyholders and insurance brokers to increase capacity is being driven in part by the flight to quality," Chris Duca, president of Navigators Pro, said in a statement.

"This is a natural step for Navigators to maintain underwriting discipline by judiciously and prudently offering additional capacity while meeting the needs of our clients," he added.

The carrier said the move was made "in response to the recent turmoil involving financial institutions and the capital markets."

In this heightened litigation environment and against the backdrop of recent government action to bolster confidence in the financial markets, corporate directors face unprecedented risks, according to the statement.

A corporation's stock price volatility can trigger the filing of a class-action securities lawsuit against the company, its directors and executive officers. Recognizing this increased exposure, directors value an insurance solution that provides enhanced security and clarity from a financially strong insurance carrier with significant D&O underwriting and claims expertise, the statement said.

Chart Info

Flag: Competitors Compared

Caption:

AIG commanded the leading market share among competitors writing liability on a claims-made basis in 2007–a category that includes management and professional liability lines, among others.