D&O renewals move in tight range as market stabilizes

The market for directors and officers liability insurance remains highly competitive, with some insurers offering coverage enhancements and renewal rates moving in a relatively narrow band.

Increases in securities class action filings and concerns over economic and geopolitical trends, though, may lead to a firmer market ahead, some brokers say.

After several years of declining rates, the market appears to be stabilizing, with brokers noting flat or nearly flat rates throughout market segments during midyear renewals. For example, Willis Towers Watson is observing public company primary rates ranging from -3% to 3%, in a recent report. Jennifer Sharkey, Boston-based national managing director at Arthur J. Gallagher & Co., said rates were “flattish,” with an overall 2% premium increase.

“It was a good renewal,” with rates essentially flat and limits and retentions holding steady, said John Kline, senior director for enterprise risk management at Transunion in Chicago and a board member of the Risk & Insurance Management Society.

Rates are trending modestly downward for private companies, where competition is stronger, said John Orr, San Francisco-based D&O product leader for Willis Towers Watson. But rates remain higher in “challenged” industries such as oil and gas, health care, life sciences and higher education, WTW reports.

Companies whose market capitalization has risen sharply have seen rate increases because their larger valuations can translate into greater securities litigation exposure, while companies with stable valuations have generally seen rate decreases, Ms. Sharkey said.

One area of price tightening capacity is in middle- to high-excess layers, said Andrew Rowling, Denver-based senior vice president at CAC Specialty, part of The Baldwin Group. Some insurers offering excess layers are not willing to follow the rate decreases offered by primary insurers or are pulling back from offering them altogether, Mr. Rowling said.

Some of these insurers may be concerned by trends in securities class actions, which are the major cause of D&O claims for public companies. The rate of filings this year is on course to exceed last year and exceed the annual average between 1997-2024, according to a recent study by attorney Kevin LaCroix, executive vice president at RT ProExec, a unit of Ryan Specialty, and author of the D&O Diary blog. Meanwhile, the median settlement reached a 10-year high of $17 million in 2025, according to Cornerstone Research.

Another concerning trend is the increase in securities class action filings relating to artificial intelligence, experts say. There were 13 AI-related filings in the first half of 2026, compared with 14 in all of 2025, according to Mr. LaCroix.

“AI systems can expose companies to multifaceted liabilities, including privacy and security issues, misinformation, data bias, copyright infringement, errors and omissions, [and] the potential for ‘AI washing,’ or claims that they’ve overstated the benefits or underestimated the risks of its use,” Eric Wedin, New York-based head of financial lines for North America at insurer Allianz said in an email.

If the so-called AI bubble bursts and share prices plunge, disgruntled shareholders could file a slew of lawsuits over allegedly fraudulent statements about AI by directors and officers, triggering a wave of D&O claims, said Mr. Rowling.

Experts cited other factors that could cause rate rises in future renewals, including geopolitical uncertainty or a rise in bankruptcies. Ms. Sharkey and Mr. Rowling predicted a modest firming in the market over the next year, barring disruptive events that could make rates jump.

But with the market still relatively soft, companies have room to bargain for coverage enhancements, said Mr. Orr. For example, some are seeing discounts for coverage of the company in regulatory investigations – coverage for individual directors and officers in investigations is already part of typical policies.

Some companies are asking for insurers to guarantee a rate for a future renewal if the company’s risk profile doesn’t change and for discounts on retentions if they agree to use an insurer’s preferred lawyers in a dispute, Mr. Orr said. In addition, some are receiving broader protections for individual board members and executives without having to purchase a standalone Side A program.

“If carriers are less willing to give premium relief, this is the time to ask for broader coverage,” Mr. Orr said.

To secure the best D&O insurance deal, Mr. Kline of Transunion advises risk managers to become intimately familiar with their company’s financial situation by studying financial filings and credit analyst reports. He also recommends that financial leaders meet directly with underwriters.

“I can say the same thing that the treasurer or the CFO says, but it means a lot more coming from him or her,” he said.