D&O rates in GB declining more slowly, says WTW

The D&O market in Great Britain is seeing median rates continue to trend down as a result of ongoing competition between insurers, according to WTW’s GB D&O Market Update. “After significant rate reductions throughout 2023 and early 2024, median rates are no longer dropping as drastically as they have over the last three years, which is in line with our expectations given the significant reductions that have already taken place,” said the broker.

WTW’s initial data for the first half of 2024 suggests that 72% of its clients that renewed in Q2 saw their primary rates decrease or remain flat. In excess layers, 82% of its clients received decreases or their rates remained flat.

“We have seen various situations where insurers have declined certain accounts either because rates have become too low or simply because some risks are outside their appetite. However, it is usually possible to replace those insurers with other insurers, meaning that rate reductions remain common, although some countries remain more challenging to find capacity for,” said WTW.

The broker noted that while new entrants have been minimal over the last year, there has been a meaningful new entrant with a broad appetite, experienced underwriters and that is looking to be commercial where possible, which WTW said has contributed to the pressure on incumbent markets.

WTW said it is also seeing increased interest in long-term agreements from some of its clients and some underwriters. “This could be a sign of the level of competition in the market, so insurers are making attractive offers to lock the business in and prevent re-marketing, but it may also be an indication that some insureds want to lock in soft market rates while they can.”

It added: “Policy terms also continue to reflect the market softening, with insurers increasingly willing to underwrite business on ‘any one claim’ limits as well as other bespoke coverage solutions.”