Reserve deficiencies and pricing pressure are raising concerns about the U.S. directors and officers liability insurance market , according to a new analysis from AM Best.
Though the market is currently profitable, years of premium declines and a competitive environment have cut into D&O reserves. The report found that direct premiums written have fallen to about $10 billion, compared to $15 billion in 2021. And pricing has decreased in 10 of the past 11 quarters.
The direct loss ratio for the monoline D&O liability is also up, hitting 54.5 in 2025 compared to 49.0 the year before.
"Despite generating solid direct underwriting results during the past few years, the competitive D&O marketplace is expected to become a little tighter in 2026, with underwriting margins likely to shrink," said Christopher Graham, senior industry analyst, AM Best, in a statement.
Soft market conditions are expected to continue in 2026, and AM Best analysts cited potential reserve deficiencies as a concern. In both 2023 and 2024, the report found that reserves were likely deficient, which could signal a forthcoming downturn in underwriting results, analysts said.
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