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D&O pricing up through Q2, finds Aon

6th August 2021 - Author: Matt Sheehan

A new report by Aon Commercial Risk Solutions (US) has found that public Directors’ and Officers’ (D&O) liability pricing continued to increase through the second quarter of 2021.

The pricing index of D&O insurance increased to 1.84 from 1.43 in the previous quarter, while the average cost of $1 million in limits increased by 28.7% compared to the prior year quarter.

However, the Q2 results were significantly impacted by two very large renewals, while roughly 10% of the programs tracked by Aon were initial public offering (IPO) programs.

Excluding the two large renewals, and the IPOs, the pricing index increased by 7.7% over the last quarter.

The increase in Q2 represents the fourteenth consecutive quarter of year-over-year price increases, following a period of eighteen quarterly pricing decreases over the prior four years.

RMS

Looking at only those programs that renewed in both Q2 2021 and Q2 2020, pricing was found to increase by closer to 9%.

Over the three-month period, Aon reported that only around 3% of primary policies renewing with the same limit and deductible experienced a price decrease, while 93% saw a price increase.

And the overall price change for primary policies renewing with the same limit and deductible was up by 14.2%.

Additionally, Aon found that 92.5% of primary policies renewed with the same limit during Q2, while 65.3% renewed with the same deductible, 61.2% with both the same limit and deductible, and 92.5% were renewed with the same carrier.

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