Aon: Public D&O Pricing Drops for Fifth Straight Quarter; 96% Retain Carriers

Despite movement in limit and deductible levels, public directors & officers (D&O) pricing continues to drop for the fifth consecutive quarter.

The pricing index from Aon Commercial Risk Solutions’ Financial Services Group decreased to 1.15 in the second quarter from 1.57 in the prior year quarter. The fifth straight quarter of year-over-year decreases come after a period of 17 quarterly pricing increases that began in Q4 2017.

The report also found 96% of primary policies renewed with the same carrier. About 95% renewed with the same limit, and 83% renewed with the same deductible.

During Q2, 83% of primary public D&O policies with the same limit and deductible renewed saw a decrease at renewal of about 13.8% on average. About 13% of renewals were flat and 3% experienced a price increase.

The average cost of $1 million in limits decreased 26.8% compared to the prior-year quarter. When comparing only those programs that renewed in both Q2 2023 and Q2 2022, pricing decreased 21.8%.

In April, 100% of primary policies received a price decrease, averaging 10.6%. May saw 67% of primary policies decrease price by an average of 10.8%, while 26% renewed flat. About 8% of companies received a price increase which averaged 30.7%.

Primary public D&O policies getting a price decrease went up again in June, with 87% renewing with an average decrease of 15.9%. Only 2% of companies received a price increase, which averaged 23.5%.

The quarterly pricing index of D&O insurance tracks premium changes relative to the base year 2001. The pricing index includes all limits purchased by publicly traded companies during the quarter. Changes in clients renewing during the quarter, changes in limits purchased and shifts in the mix of limits between ABC limits and Side-A-only limits can affect the index’s overall performance.

Topics Aon Directors Officers