Study: D&O rates fall again.Directors and officers liability insurance Directors and Officers Liability Insurance is insurance payable to the directors and officers of a company to cover damages or defence costs in the event they are sued for wrongful acts while they were with that company. rates fell for the second straight year in 2005, even as claims susceptibility, frequency and severity continued to climb, a recent survey by consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a Tillinghast shows. Tillinghast's D&O liability insurance average premium index dropped another 9% in 2005, following a 10% decrease in 2004. The median premium index reached the lowest point since 2001, while the average premium index decreased 18% from its high of 1,237 in 2003, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the survey. Competition remained fierce in excess-layer D&O coverage for large public companies, where premiums for repeat participants dropped 10% in the excess layer and 8% in the primary layer. The most significant soft-market conditions were observed in the government and other nonprofits business class, followed by merchandising, technology, and transportation and communication classes,Tillinghast said. Some pockets of hard-market conditions remain, notably in durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. , education, health services health services Managed care The benefits covered under a health contract and nonbanking financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , such as insurance carriers and investment banking. In a statement, Elissa Sirovatka, who leads Tillinghast's D&O liability survey program, said premium decreases are expected to flatten by the end of 2006 as the amount of D&O coverage written by insurers declines. Sirovatka said D&O carriers provided about $1.5 billion in capacity in 2005. The hard-market conditions in the reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. D&O marketplace are expected generally to continue this year, according to Tillinghast. The survey also showed that an increasing number of board members--of both public and private companies--inquired about D&O coverage in 2005. Thirty percent of nonprofit respondents said they received D&O inquiries from their directors, while 19% of public companies and 5% of private companies said they made changes as a result of inquiries. Conducted by professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. firm Towers Perrin through its Tillinghast business, the study of D&O claims and insurance purchasing trends involved polling 2,694 private and public groups. D&0 Premium Index Trends, U.S., For-Profit Only According to the 2005 index, D&O coverage costs decreased approximately 9% on average between 2004 and 2005 for U.S. for-profit participants. The median premium index reached the lowest point since the 2001 survey. The average premium index has decreased 18% from its high of 1,237 in 2003. Year Index Median Index Average 2000 349 560 2001 397 720 2002 496 931 2003 562 1,237 2004 433 1,113 2005 401 1,010 Source: Tillinghast |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion