Directors & officers liability insurance (D&O) and professional liability business is generating accident year underwriting losses for the industry despite recent stability in loss ratios, according to a new segment analysis from Fitch. D&O premium rates were previously lagging the market recovery in the broader commercial lines segment, but pricing trends are now catching up.

Fitch collected D&O supplement data to analyze industry aggregate underwriting results, and in doing so, the firm found that direct written premiums grew by approximately 6 percent in 2012 and the industry direct loss ratios improved by three points to 48 percent. Aon Corp.'s D&O Pricing Index shows that rates in fourth quarter 2012 were 9.9 percent above the prior year fourth quarter.

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