The start of 2004 was a testing time for the global D&O
market, reports Willis’ Directors & Officers Index which asked participating insurers for their views about the past three and next three months.
Results of the index revealed a favorable perception of the future market for clients even though high profile claims and investigations made insurers nervous about potential losses. As a result premium rates were still generally increasing in the first quarter of 2004, however, in the second quarter of 2004 there was a noticeable leveling out in the market as the influx of new carriers increased competition levels.
Responses for the Willis Index, looking at non-US companies, were invited from 95 percent of the market and the results speak volumes.
Sixty-one percent of insurers who responded felt that primary premium rates had dropped in the past 3 months, with 69 percent of the market anticipating that rates would further decrease in the next three months. This sentiment was echoed on an excess basis with even more definitive feedback; 46 percent of insurers believing that rates had dropped on average by between 11 percent and 25 percent in the past 3 months, with 75 percent anticipating a similar drop in the forthcoming 3 months.
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