By Michael Loney
April 11 - (The Insurer) - The U.S. directors and officers liability insurance segment reported its best underwriting profit in a decade in 2024, according to Fitch, which expects market stabilisation this year.
The D&O loss and defense and costs containment ratio improved by 0.5 percentage points in 2024 to 59.9%. Fitch said this represented strong underwriting profit and the best result since 2014.
The rating agency added that “performance is unlikely to be sustainable amid declining premium revenues and deteriorating premium rates, as well as the segment’s inherent underwriting volatility related to changes in litigation activity, defence costs and settlement trends”.
D&O direct written premiums grew by 134% from 2018 to 2021 but fell 28% from 2021 to 2024, to $10.8 billion.
Fitch expects the pace of premium volume decline to slow in 2025.
“Market conditions are expected to stabilise in 2025, following a period of heightened market competition,” it said.
Nearly all carriers in the D&O market reduced premium levels in 2024 because of a softening rate environment.
“Chubb Corporation is the new market leader with an 8.8% share, despite a 12.5% reduction in direct written premiums (DWP),” Fitch said.
Former leader Axa XL is now the third-largest D&O carrier after a 20% drop in DWP, following a 40% decline in the prior-year period, the rating agency continued.
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