Rate increases have led to sizable premium growth in the US directors and officers (D&O) insurance, but loss ratios have not yet shown improvement, according to a new AM Best report, REinsurance News writes.
The rating agency notes that through the first three quarters of 2021, the growth rate of direct D&O premium compared with the previous year is on par with the growth seen in 2020 over 2019.
Projected direct premium written for 2021, based on actual premium of $14.6 billion as of Sept. 30, 2021, is more than double that recorded in 2018, demonstrating considerable momentum for the line.
Nevertheless, the direct loss ratio loss ratio has worsened even as premium has risen by 15% on average over the last six quarters through third-quarter 2021, AM Best observes.
According to the report, the rise in costs are not limited to the losses, with defense and cost containment expenses for D&O liability, mainly for legal expenses, also increasing. Read more.
