Broker says renewals will 'need the right approach'
Jardine Lloyd Thompson (JLT) has warned that companies should expect a much more intrusive underwriting process when it comes to renewing Directors' and Officers' Liability (D&O) insurance and should prepare with the right approach.
Michael Lea, head of D&O liability, JLT, said: "We are seeing indications already that D&O insurance premiums for large financial institutions and firms exposed to the property market are up almost 40% and that for other sectors the starting point is flat to 10% increases even on better performing companies. Insureds can avoid the worst of these increases and build sound relationships with their insurers by observing a few simple principles during the renewal process whilst seeking to satisfy the concerns of their D&O insurers."
The Lloyd's broker said D&O insurers have suffered tough renewals of their own reinsurance treaties over the New Year and may now be seeking to pass premium increases onto their customers. Following and excess markets are also becoming more selective about which primary lead markets (i.e. main insurers) they are prepared to follow.
Lea added: "It isn’t all bad news though. Unlike the hard market of the mid 1980s there is still plenty of D&O Insurance capacity with placements of US$300m and more available at competitive terms, and there is no sign of Insurers looking to impose coverage restrictions."
JLT has launched a Ten Step Toolkit for D&O renewals - Prepare Early for a Trouble Free D&O Renewal, to help companies tackle this process in the most effective way.
"Companies need to realise that renewals are about much more than a transactional process. By adopting a few simple measures and techniques, companies can ensure that they differentiate themselves from their peers and achieve a trouble free renewal," concluded Lea.