Which insurance specialty should brokers target?

“Financial lines insurance – particularly directors & officers insurance – is a technical and specialized insurance class with an outsized profi le, given the vested interests of those being protected. Little corporate risk-taking would take place in the absence of D&O insurance.For a decade or more, an oversupply of capacity and an apparent willingness by certain insurers to incur rolling years of losses has resulted in a multi-year soft market. Right now there is a real opportunity for brokers with strong fi nancial lines teams who can advocate actively on behalf on their clients to diferentiate themselves from those who don’t.”

“The responsibility and accountability on company directors has signifi cantly increased and continues to grow. Directors & officers liability insurance has recently become far more complex and challenging for clients. Insured losses from securities class actions have impacted the D&O market signifi cantly, and specialist skills are required to ensure clients continue to obtain the right cover and capacity. Reduced competition, changing policy coverage, increased premiums and a return to underwriting disciplines for D&O, particularly for listed clients with an exposure to Side C securities claims, require a broker to have a deep understanding of local and global insurance markets.”

“The rise of class actions and signifi cant Side C losses means D&O cover has become unprofi table for a number of insurers in recent times. Capacity has reduced and premiums are soaring – in a word, the market is volatile.Insurers are focusing on continuous disclosure. Organisations need to be transparent on how they discharge their obligations and be able to respond to insurer enquiries as to their processes and practices. It is also important for brokers to work with their clients and engage with their D&O insurer early to formulate a strong strategy to differentiate and communicate their risk.”