Analyst firm AM Best said in a special report that the professional liability market is likely to maintain its growth momentum coming into 2017, despite pressures relating to over-capacity.
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Business Wire report on the AM Best forecast noted that midsize and multinational industry players have emphasized expansion in the spaces of directors and officers liability (D&O), errors and omissions coverage (E&O) and employment practices liability (EPLI) as part of a general strategy to bolster top line growth.
Furthermore, the report connects growth from 2011-2013 to rate increases, which were curbed in the beginning of 2014 as more players jostled to compete in the professional liability space, resulting in downward pressure on rates.
This year, AM Best anticipates a “robust” performance from players in this specialty, the report also said. Among others, D&O providers are expected to initiate growth by focusing on value added offerings through coverage enhancements.
Cyber-attacks are expected to be a major element in the performance of professional liability players and “could elevate the challenges for D&O insurers to generate profits,” the wire report further explained.
“In addition, some insurers may need to tighten coverage terms, increase deductibles, or step away from accounts that have poor loss experience in order to meet profitability goals going forward,” concluded the report.
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