Rates may be starting to level off for both directors and officers (D&O) and cyber liability insurance lines, according to benchmarking data from BRP Group Inc.

According to this year’s survey of 320 public companies, produced in collaboration with Nasdaq, average D&O retentions decreased to $2.1 million in 2023 from $3.7 million a year earlier, and rates remained relatively flat — up or down less than 10% on renewal — for nearly half of all publicly traded companies last year, while the remainder saw larger rate decreases.

Pricing in the cyber liability insurance marketplace leveled off after several turbulent years of significant rate increases, the report noted. Almost 60% of respondents reported flat cyber liability renewals in 2023, with no meaningful distinctions between revenue, market cap, or industry.

“In light of recent Securities and Exchange Commission (SEC) rules surrounding cyber security disclosures, we felt it was extremely important to add meaningful independent data on cyber liability insurance in this year’s report,” said Mike Tomasulo, senior managing partner and national management liability practice leader at BRP Group.

D&O Insurance Market

In the D&O insurance market, securities class action (SCA) filings saw a modest increase to 199 in 2023 from 174 in 2022. By sector, health care (44 cases), industrials (32), and financial institutions (30) being the top three targeted industries.

The market has become increasingly competitive, with more than 50 carriers actively writing D&O for public companies. American International Group Inc., Axa XL, and Chubb Corp. were the top carriers providing primary D&O insurance in 2023, with market shares of 18%, 13%, and 11%, respectively, according to the report, which surveyed 120 D&O underwriters.

The relationship between market capitalization and D&O limits is evident in the data. Companies with a market cap of $100 million or less had average D&O limits of $17.3 million and median limits of $10 million, while those with a market cap of $5 billion to $10 billion had average limits of $108.1 million and median limits of $110 million.

D&O rate changes varied by industry, with the banking sector last year experiencing a 5.6% average increase due to several bank failures, compared to a 14.5% reduction the previous year. Technology companies saw rate reductions drop by more than half to -14.3% on average in 2023, while biotech/pharmaceutical firms experienced largely the same level of rate reductions (-22.6%) as the previous year.

Looking ahead, D&O insurers expect the overall marketplace to continue flattening, with 64% expecting primary D&O renewal rates to remain flat and 20.2% expecting rates to be down 5% to 10%.

U.S. D&O underwriters ranked securities claims, bankruptcy, and regulatory issues as their top areas of concern.

Cyber Liability Market

In the cyber liability insurance market, 58% of companies experienced flat renewals in 2023, while 12% said rates declined 10% to 30% and 8% reported rate decreases of more than 30%. Cyber rate increases went up for the remaining companies, with moderate increases of 10% to 30% were reported by 13%, and 8% saw rate increases of more than 30%.

Large companies with market cap over $10B saw the largest premium reductions, due in part due to seeing the largest premium increases in the past few years, the report noted.

Among companies with a market cap of $100 million or less, average cyber limits in 2023 were $2.9 million and median limits were $2.5 million, while average premium was $47,653 and median premium was $28,080.

Among the largest companies, with market cap of $5 billion to $10 billion, average and median cyber limits last year were $37.5 million. Average and median cyber premium was $715,005.

Beazley PLC, Coalition, and Chubb were the top three primary carriers in the cyber liability insurance market, with market shares of 30%, 18%, and 11%, respectively. Average cyber limits for companies with a market cap of $100 million or less were $2.9 million, with an average premium of $47,653, while companies with a market cap of $5 billion to $10 billion had average cyber limits of $37.5 million and an average premium of $715,005.

For more information, visit BRP’s website. &

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