Public primary D&O rate increases slow to 7.3% in Q3: Aon
Price increases are continuing to ease off in the D&O market, with Aon’s quarterly pricing index reporting that primary policy prices for public companies with the same limit and deductible were up on average 7.3% in the third quarter.
The figure marks a slowdown from Q2, when price increases registered at 14.2% and compares with a recent high of 26.2% in the first quarter of 2020.
Aon said Q3 was the fifteenth consecutive quarter of pricing increases for primary policies that renewed with the same limit and deductible.
In the third quarter, 2% of primary policies received pricing decreases, 17% of policies renewed flat, and 81% of companies received a pricing increase.
A total of 95.8% of primary policies renewed with the same limit, whilst the number of policies renewing with the same deductible continued to increase.
In Q3, 78.8% of policies renewed with the same deductible, up from 64% in Q2 and lows of around 50% in the third quarter of 2020.
The easing of rate increases comes as securities class actions, a major source of D&O claims, continue to be filed at a lower frequency than in previous years.
According to Stanford Law School, there were 47 new securities class actions in Q3, as opposed to 98 in Q3 2020.
Aon projects that filings for the year will come in at 203, down from a high of 411 in 2017.