European directors expect little change in D&O premiums, finds WTW poll
Health and safety knocks cyber from top of risk list
The overwhelming majority of European directors either expect their premiums for D&O cover to remain the same or increase next year, despite much discussion about a softening of rates in the market, according to WTW and Clyde & Co’s 2024 Global Directors’ and Officer’s Survey.
Only 11% of European directors surveyed said their premiums had decreased in the past year, while 42% said the amount they paid stayed the same. Some 35% reported an increase in premiums for D&O cover.
Only 14% of European directors surveyed said they expect their premiums for D&O cover to decrease next year, while 46% expect no change and 26% expect to pay more.
Europe’s directors and officers named health and safety as their new top risk in the 2024 survey. It is the first time the risk has taken the top spot since the survey began. The global results also saw health and safety knocking cyberattacks from the top spot.
Louise Dennerståhl, head of FINEX Europe (excluding GB) at WTW, said health and safety has been a growing risk in Europe over the past four years. The survey tracked health and safety as the biggest risk for 40% of European D&Os in 2021, rising to 83% in 2024 to usurp cyberattacks, which has held the number one spot since 2021.
“Health and safety is at the top of the agenda for D&Os in Europe; this is not surprising, with one war on European soil, and concerns on the general security for Europe,” Dennerståhl said.
She further noted that health and safety is the number one risk across all sizes of European businesses surveyed, from companies with less than $50m in revenue to companies with revenues of more than $5bn.
However, the priorities change for directors and officers in different sectors. While health and safety is the top risk for directors in healthcare, transportation and retail, industrial, and energy and utilities, the service sector rated data loss as its biggest risk, although health and safety followed in second place. Europe’s directors in finance and insurance chose cyberattack as their leading risk in 2024, with health and safety further down the ranking in sixth place.
Dennerståhl said that although cyberattack has fallen to become the second-biggest risk for Europe’s directors, it has actually risen to its highest proportion of respondents, up from 67% in last year’s survey to 79% of European directors in 2024. However, the proportion of directors in Europe naming cyberattack as their biggest risk was lower than in all regions other than Africa (72%) and Australasia (69%).
Dennerståhl said one of the biggest surprises from the European results is the absence of climate and environmental risks from the top seven.
“While this is a major concern to the European population, it does not seem to have made its way on to the list of top risks in the boardroom. In addition, the D&Os view on the climate risk in Europe has not changed – it has not been in the top seven for the last four years of the survey,” she said.
Pollution was the top environmental risk for 58% of European directors, followed by climate change at 52%, biodiversity at 37% and forever chemicals PFAS at 28%.
Europe’s directors diverged from all other regions regarding their priorities for D&O insurance coverage, putting cybersecurity coverage at the top followed by settlement of claims and cover for fines and penalties.
Europe’s top seven risks for directors and officers
- Health and safety (83%)
- Cyberattack (79%)
- Data loss (77%)
- Regulatory breach (72%)
- Bribery and corruption (72%)
- Systems and controls (71%)
- Breach of sanctions (65%)
2024 Global Directors’ and Officers’ Survey, WTW and Clyde & Co
