A new report on the directors’ and officers’ (D&O) insurance market has highlighted increased regulatory scrutiny, growing litigation risks, and shifting market dynamics as key themes for 2025.
The Global Insurance Law Connect (GILC) D&O Global Trends 2025 report, which surveyed 24 markets, identifies legislation, environmental, social, and governance (ESG) issues, and macroeconomic uncertainty as the primary concerns influencing underwriting decisions and pricing structures.
The findings suggest that claims against directors are increasingly being upheld, while demand for D&O insurance is rising across both mature and developing markets.
Among surveyed professionals, 74% pointed to legislative and regulatory changes as the most influential factor affecting the market. ESG considerations ranked second at 57%, while 52% cited macroeconomic conditions. Cyber risk also remains a prominent issue, with 48% highlighting its impact on market sentiment.
The report indicates a shift from the concerns outlined in 2021, when the market was still responding to the aftermath of the COVID-19 pandemic. ESG, which was a secondary issue at the time, now plays a central role in underwriting and liability discussions. Regulatory pressures have intensified, and courts are increasingly upholding claims against directors, adding new complexities to corporate governance.
Legal and regulatory changes are driving an increase in claims, with 61% of respondents reporting a rise in litigation over the past five years.
Additionally, 55% noted that courts and regulators are now more likely to rule in favour of claimants. This trend spans both developed and developing markets, signalling heightened legal exposure for directors worldwide.
Premium trends vary significantly based on market maturity. While 62% of respondents reported a general increase in premiums, mature markets such as the UK, Australia, Finland, and the Netherlands have seen prices decline.
In contrast, developing markets - where political and economic uncertainty increases litigation risks - continue to experience rising costs.
In some markets, regulatory frameworks have influenced pricing structures. For example, Chilean regulations restricting companies from covering directors’ policies have slowed market growth. Meanwhile, some mature markets have raised concerns about aggressive price competition.
In 2024, industry leaders warned that some underwriting practices were unsustainable, pointing to potential pricing corrections in the near future.
Despite pricing variations, demand for D&O insurance is rising globally. Poland has seen an expansion beyond large corporations to small and medium-sized enterprises (SMEs), while the Netherlands reports increasing uptake among non-profits and smaller businesses.
Regulatory changes are also influencing demand. In China, new company laws introduced in 2024 have led to the emergence of tailored D&O products for non-listed companies. In Greece, a combination of financial instability, regulatory updates, and high-profile corporate failures has prompted greater interest in D&O coverage.
As 2025 progresses, market conditions are expected to stabilise in some mature regions, while others may experience fluctuations driven by capacity adjustments and shifting regulatory environments.
The report suggests that pricing corrections could occur depending on global M&A activity and economic conditions following a series of major elections.
How do you see the future of the D&O insurance market unfolding? Share your thoughts in the comments.
