Propelled by price increases that surpassed 10% quarterly, directors & officers insurers saw direct premium growth of 35% during 2021, according to AM Best, which reported the sector's premium total reached $14.6 billion. "Excess capacity has been a primary contributor of the disparity between rates and the pricing of risk exposures, even as the loss ratio crept upward" Christopher Graham, senior industry analyst, industry research and analytics, AM Best, said in a release. "With results worsening because of factors such as social inflation, litigation funding, environmental, social and governance concerns and cyber-related claims, insurers have pushed aggressively for elevated premiums upon renewal, as well as higher self-insured retentions and more-restrictive terms and conditions, Where the market moves from here will be dependent on if insurers remain vigilant in meeting rate adequacy and offsetting claims costs, which continue to rise, according to the credit rating agency. Further, as court cases and litigation were delayed during the pandemic, the slowed growth of defense and cost containment expenses seen in the previous year might be temporary. AM Best noted the sector's premium growth and direct profitability might not be truly representative of the complexity D&O insurers still face. "The improvement in results in 2021 has to be viewed as a possible aberration, rather than the start of a trend — at least until full-year 2022 results are available," David Blades, associate director, industry research and analytics, AM Best, said in a release. "The D&O line's bottom-line profitability in 2022 will indicate whether carriers' actions were enough to generate true price adequacy and serve as a springboard for sustainable improvement." The above slideshow highlights the top insurers in the D&O (monoline) market based on 2021 direct premiums written, according to S&P Global Market Intelligence and the National Association of Insurance Commissioners (NAIC). Related:
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