Brought to You in Collaboration with Nasdaq
In this year’s second annual survey, many companies provided critical information regarding their Directors & Officers Liability insurance programs. The result is one of the only independent reports about spending and purchasing in the D&O marketplace. Our takeaway — after several years of significant increases in D&O insurance costs, we are finally seeing a reduction in both premiums and retentions.
The benefit to you? You can see how your insurance program stacks up against similar companies by both industry and market cap, independent of who placed the coverage.
The Survey Includes
- Data from over 350 Nasdaq-listed companies.
- Granular insurance limits to benchmark against broken down by market cap.
- Average and median premium amounts listed by industry and market cap.
Get the Report
To access the full 2023 report, please complete this survey here.
2023 Executive Summary
View our 2023 Executive Summary for the overview of this year’s findings here.
- 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.
Did You See the Same Decrease as Your Peers?
Top two industries for rate decreases
Average Premium Decrease for primary $5 M – All Industries
- All industries – 20.3%
- Healthcare – 21.2%
- Technology – 30.3%
- All industries – 9.4%
- Healthcare – 14.5%
- Technology – 12.0%
Recent IPOS (Past 3 Year)
- All Industries – 27.6%
- Healthcare – 25.8%
- Technology – 36.7%
Read Our D&O Insights here
How Does Your Retention Line Up with Other?
In addition to premiums, retentions are also significantly altered by whether or not a company recently was an IPO. Below is a small sample of the retention data captured in the survey.
Are You Buying the Right Amount of Coverage?
Benchmarking your limits and premium against your peers is very valuable information. However, it is even more important to understand what a claim settlement would look like for a company of your size. Properly sizing your D&O program could save hundreds of thousands in unnecessary premium costs.
Rate & Limit Change Observations:
Rates: Companies are PAYING less
Limits: Companies are BUYING less
Based on our exclusive database of information provided by Stanford Securities Litigation Analytics, over the past 10 years, when sued in a securities claim, a company that has a $500M – $1B market cap had the following settlements:
Total Average Limits: $34.8M
Total Median Limits: $30M
Also factor in the need to add additional costs for defense, potential sidecar derivative actions, and the unlikely SEC investigation, and all in, the average cost of risk is roughly $13M – $15M. A company that is purchasing $35M with a $2.5M retention could be potentially over-insuring by $15M – $20M in limits.
Average Settlement: $8.5M
Median Settlement: $6.5M
Get in touch
Contact our team for more information about the report or a full D&O insurance program analysis.