The winding down of the financial crisis is reflected in the pricing for directors' and officers' liability insurance for the financial services sector, a new report finds. Prices decreased 2.7% in the third quarter of 2009 compared to the rates seen in Q3 of 2008, according to the Q3 Quarterly D&O Pricing Index from Chicago-based Aon Corp. The decrease comes after double-digit increases in each of the previous four quarters.
Aon notes that for the sector, which includes insurers, banks and diversified financial firms, D&O claims and pricing tend to move in the opposite direction of the financial markets. Accordingly, with the stock market rising this year, shareholders were less likely to file suit. This was evident in the fact that for the first three quarters of 2009, 130 federal securities class action lawsuits were filed, this represents a 20% decrease from the 163 filings seen during the same period the prior year.
"The decreasing number of claims may signal an end to the litigation explosion for financial services firms," Mike Rice, national practice leader of Aon's Financial Services Group and author of the Quarterly D&O Pricing Index, said in a statement. "In 2010, we expect the market for D&O coverage to continue to soften for financial institutions as well as most of the other industry sectors."
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access