BRP Group and Nasdaq’s Second Annual Directors and Officers (D&O) Benchmarking Report Reveals Significant Decrease in Rates Year over Year
On average Nasdaq-listed public companies saw their primary D&O insurance premiums drop by 20 percent in 2022, with recent IPOs seeing even greater decreases
More than 350 public companies participated in this year’s survey, conducted in collaboration with Nasdaq, Inc. (“Nasdaq”). Participating companies provided key policy information regarding their D&O insurance coverage. One of the top findings reveals that after several years of significant increases in D&O insurance costs, businesses are now seeing a significant reduction in the premium and retention of their D&O coverage.
In fact, the Nasdaq-listed public companies that were surveyed, on average, saw their primary D&O insurance layer decrease by 20 percent in 2022. Recent IPOs or DeSPACs saw an average 28 percent rate decrease for their primary layer. Of all companies surveyed, recent Healthcare and Technology IPOs saw the largest decreases at over 30 percent.
One finding of note was that even in this environment of rate decreases, companies are opting for lower coverage amounts. The report found that 25 percent of companies decreased their overall limits, an increase from 2021 in which only 10 percent of companies decreased their overall limits.
“Benchmarking your limits and premium against your peers is very valuable information, especially in a time of significant rate changes,” said
Additional key findings from the report includes:
- The top three industries that continue to see the most securities claims and pay the highest rates were Healthcare, Technology and Consumer Discretionary
- On average, companies saw their total D&O insurance program costs decrease by 35 percent, driven by lower excess and A-Side rate
- Recent IPOs and DeSPACs saw their retentions drop by 40 percent
- More than 75 percent of companies surveyed saw their premiums remain flat or decrease
The report fully breaks down limits and purchasing data by industry, market capitalization and whether the company is a recent IPO or tenured public company. Additional data is also provided on the changes in rates since last year on excess and A-Side layers and identifies the most used primary carriers.
For a copy of the executive summary and information about obtaining the full report, please click here.
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The BRP Group Management Liability Practice and Nasdaq worked together for the second year in the row, to produce the D&O Benchmarking Report. Our process involved crafting a survey that was distributed to Nasdaq listed companies, which was designed to gather crucial information on their director’s and officer's insurance. After receiving more than 350 completed responses, we thoroughly analyzed the data and utilized it to produce a comprehensive final report.
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