UK Directors' & Officers' Insurance Market 2024

1.1 Market overview
1.2 Key findings
1.3 Critical success factors

2.1 Soft market conditions have led to a drop in market size

• UK D&O GWP has declined, but it remains significantly above historic levels
• Market conditions have softened but differ by size of business
• Caution is tempering underwriting approaches

2.2 D&O profitability was boosted by market correction, but the sector is facing uncertain headwinds

• Profitability has improved, but uncertainties remain
• Rising insolvencies are a primary concern
• Regulatory and legal activity rebound following the pandemic
• ESG, cyber risks, and data loss remain high on the agenda

2.3 The number of companies with D&O is growing, but cost pressures are impacting product holding

• Penetration rates continue to gradually rise
• SMEs are re-evaluating their insurance holdings amid rising cost pressures

3.1 Appetite and capacity have returned to the D&O market
3.2 AXA remains the market leader for SME D&O cover

• AXA’s D&O market share is boosted by its Ageas renewal rights acquisition
• Allianz has grown its regional hubs

3.3 AXA is the most favored insurer for D&O placement among brokers

• AXA has focused on improving broker service and boosted its D&O proposition
• RSA is targeting Profin growth
• Fewer brokers are placing D&O business with more than one insurer

4.1 SME buying habits have been largely unaffected by changing market conditions

• Brokers remain the dominant distribution channel for D&O due to the need for advice and recommendation
• D&O is now offered by the vast majority of commercial brokers
• The internet remains the most popular method, but the proportion going online has stagnated
• Personal interactions retain a critical role

4.2 Switching has increased as competition returns

• Almost four in 10 SMEs have been with their D&O provider for less than three years
• Shopping around has risen among all sizes of SME
• After price, the level of cover remains an important driver of switching

4.3 Legal services are the most sought-after added-value service

5.1 UK D&O market growth will be impacted by softening conditions

• Market GWP will eventually resume slow growth to 2028
• Premium rate movements and market conditions will continue to differ by sector

5.2 The evolving risk landscape will be under intense scrutiny

• Economic indicators will be closely watched
• Other factors that could impact D&O

6.1 Abbreviations, acronyms, and initialisms
6.2 Methodology

• the analyst’s 2023 UK SME Insurance Survey
• the analyst’s UK Commercial Insurance Broker Survey

6.3 Definitions

• SME

6.4 Secondary sources
6.5 Further reading

• About the Analyst
• Contact the Publisher

Table 1: Impact of cost pressures on the D&O policyholding considerations of SMEs, 2023
Table 2: Method most recently used by SMEs to purchase D&O by size of SME, 2023
Table 3: Length of time SMEs have been with their D&O provider, 2023
Table 4: D&O switching levels and behavior at last renewal by size of SME, 2023
Table 5: UK D&O GWP, 2019-28f
Table 6: Economic indicators that will impact the future of the D&O market

Figure 1: D&O GWP is declining, following significant hard market growth
Figure 2: Marsh’s insurance index reveals that UK D&O premium rates have declined since Q1 2022
Figure 3: Company insolvencies have risen substantially since 2021
Figure 4: Financial concerns are top of the agenda for UK SMEs
Figure 5: D&O penetration rises with company size, although there was a slight decline among medium-sized SMEs
Figure 6: Medium and small companies are most likely to be re-evaluating their D&O holdings as a result of cost pressures
Figure 7: AXA is the leading UK SME D&O insurer
Figure 8: AXA, Aviva, and Zurich lead the market across all sizes of SME
Figure 9: AXA leads the way for D&O among commercial brokers
Figure 10: Brokers are the main channel used by SMEs to purchase D&O
Figure 11: While the internet dominates for all SMEs, smaller SMEs are more likely to buy D&O following personal interaction than mid-sized companies
Figure 12: Almost four in 10 SMEs have been with their D&O provider for less than three years
Figure 13: D&O switching levels have increased among SMEs
Figure 14: Price, cover, and added risk management services are increasingly important drivers of switching for SMEs
Figure 15: A significant proportion of SMEs with D&O would like risk management services from their insurance provider but are not currently receiving them
Figure 16: Legal services are the most sought-after added-value service by SMEs with D&O
Figure 17: UK D&O GWP will stabilize to 2028