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December 2022 / 10 Min Read

Four Steps to Take Advantage of the Softening D&O Market


The global D&O market is softening; use these four steps to take best advantage of the evolving market before conditions change.


Key Takeaways

  1. The Directors & Officers insurance market is experiencing clear and consistent signs of softening after three years of a hard market.
  2. A variety of factors have led to better pricing, broader terms and greater capacity.
  3. Risk buyers have an opportunity now to capitalize on this evolving market.

Globally, the Directors & Officers (D&O) insurance market is experiencing clear and consistent signs of softening, with flat to decreasing premiums and significant increases in capacity, after three years of a hard market. This trend is expected to continue into 2023.

However, the prospects of a recession in early 2023 may dampen the softening market as recessionary conditions can lead to increased litigation. Buyers should act now to capitalize on this evolving market.

D&O Conditions from a Regional Perspective

New markets, reduced IPOs, reduced securities litigation, a decline in claim frequency and better underwriting results have led to a more competitive D&O market. For the short term, that has resulted in better pricing, broader terms, and greater capacity but there are differences within the regions.

North America:

U.S.: Average price per million decreased 19.9 percent compared to the prior-year quarter: price per million, adjusted for certain items, decreased 14.7 percent; price per million for clients that renewed in both Q3 2022 and Q3 2021 decreased 15.3 percent; 46 percent of primary policies renewing with the same limit and deductible experienced a price decrease; 16 percent had a price increase. Overall price change for primary policies renewing with the same limit and deductible was down 4.0 percent.1
Canada: Capacity continues to expand and pricing is moderating for public and private companies on a case-by-case basis.2


The largest premium reductions have been seen across European and North American accounts. North American accounts saw a 12 percent reduction in sides ABC rates in the second quarter 2022. This is almost double the second largest reduction of 6.4 percent seen in the UK region. From a rate-on-line perspective, APAC and North America were standouts with rates dropping an average of 16 percent for APAC and 12 percent for North America in Q2 2022 compared to 2021.

Latin America:

Rates are softening on excess layers as new capacity enters the market. However, primary layers remain stable with carriers seeking 5-10 percent rate increases tied to inflation.

Tips to Take Advantage of this Market

Start early with incumbent meetings

Roughly six months prior to renewal, meet with incumbent markets to strengthen the relationship between the buyer and the insurer and help the buyer recognize changes in the market that will shape the ultimate renewal strategy. Conversations will reveal the incumbent’s plan, what they are seeing on their books, trends and if the evolving marketplace has led them to do more risk-differentiating underwriting and less class underwriting, which will benefit good D&O risks. An early start will provide buyers with knowledge about whether they can rely on incumbent capacity or start the process to find new capacity

Take advantage of a virtual environment and prepare for underwriting meeting

Face-to-face meetings are valuable. However, the virtual working environment has also made it easier for the buyer’s senior leadership to connect with underwriters to tell their story more effectively, which can be an advantage at renewals. Preparation for those underwriting meetings is critical because buyers will likely have only one underwriting meeting with each insurer. Adequate preparation will allow the buyer to present the organization to underwriters in a favorable light, differentiating the company’s risk from others competing for D&O capacity.

Meet with new markets

The evolving market has led to a host of new carriers and capacity moving into the D&O market in the U.S. and London. Meeting early with new markets can provide a chance to understand these markets’ underwriting strategies and how they might fit with the buyer’s needs, and for the buyer to tell the company’s story in preparation for the market potentially playing a significant role in the renewal.

Prepare your own ESG story

There are dozens of ESG raters providing information on companies and those raters have come under scrutiny over concerns of the reliability of their assessments. As ESG-related litigation has evolved it has gained additional scrutiny from underwriters, who will often rely on ratings. Therefore, businesses should also have a strong ESG story in place, beyond what is provided by raters. A well-documented and accurate ESG narrative will help position your organization favorably in the marketplace. Work with a broker that is experienced in building a strong ESG narrative specific to D&O underwriters, which includes key risks and opportunities related to reporting, governance, environment and climate, people and social responsibility, and accountabilit.

What else is on underwriters’ minds? During the underwriting process, clients should also be prepared to address their position on the Russia/Ukraine conflict, supply chain issues, labor shortages, and inflationary pressures, to name a few.

Talk With Us

If you would like to discuss any aspects of these insights please do not hesitate to get in contact with our team.

North America
Kristin Kraeger
Chief Brokering Officer
[email protected]

Catherine Lanctot
Canada D&O Leader
[email protected]

Tom Mole
D&O London -- UK Leader
[email protected]

Jayne Minihane
Executive Director, Global Broking Centre
[email protected]

Harry Edwards
D&O London -- APAC Leader
[email protected]

Sergio Torres
Specialty Leader LATAM – Financial & Professional Services & Cyber
[email protected]

Laura Wanlass
Partner, Practice Leader
Global Corporate Governance and ESG Advisory
[email protected]

Insurance products and services offered in the United States by Aon Risk Insurance Services West, Inc., Aon Risk Services Central, Inc., Aon Risk Services Northeast, Inc., Aon Risk Services Southwest, Inc., and Aon Risk Services, Inc. of Florida and their licensed affiliates.


1 Quarterly D&O Pricing Index, Third Quarter 2022
2 2022 Insurance Market Report, Canada

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