Where is the growth for Directors’ and Officers’ insurance?
Find out what the experts have to say about the growth sectors for D&O insurance.
Here are some highlights from the discussion panel at the Steadfast Convention in March, under the topic “Distraught and overwrought: The pressure points of D&O insurance”.
The panel was moderated by Andrew Sharpe from DLA Phillips Fox.
Growth in private D&O
Jason Howard, Vice President and Regional Manager, Chubb Insurance
“We realise we cannot get the rate we need in (public) D&O. It’s too competitive. It’s overserviced and it’s too volatile. In the last few years, we have pushed into other classes, (such as) private D&O. We just feel like for us, we need to balance our book out more and more.
“It’s our fastest growing product for financial lines. It’s probably our fastest growing product for Chubb nationally as well.
“We’re selling D&O together with a package of policies – Management Liability, Employment Practices Liability, even in some cases PI – all wrapped in together. That’s certainly where we see our strongest growth for us.
“I don’t see a lot of growth in the public D&O space. Our private D&O and
Management Liability is roughly the same size as the public sector.”
Reaching the middle market
Jonathan Upton, Managing Director, Indemnity Corporation Pty Ltd
“We have seen, in Management Liability, there has been growth of about 15% per annum over the last few years in terms of take up.
“(Management Liability) is probably one of the most opportune products to market to our clients. Each of our clients in their own right has a very big exposure these days that unfortunately most of them are fairly blind to and we as practitioners don’t tend to understand ourselves, to market to them.
“The usual feeling is that ‘it’s not going to happen to me’. They don’t believe that their employees are going to feel badly about the way they are treated. They don’t see that ASIC has the tendrils to reach out and affect them. They tend to have fairly strong pushback that it’s just a beat up to try and sell product.
“The toughest part of the sale process is that there isn’t a lot of case history in the law to middle markets. We can produce some scary results at the big end of town. If we were armed with the information – give us some working claims knowledge that we can then sit down and talk to the clients about.”
No company safe from regulators
Cameron Maclean, DLA Phillips Fox, Perth
“There’s a misconception that the regulators are only interested in the top end of town and that small to medium companies do not attract the attention of the ACCC. While it might start with a mega corporation, it filters down.
“The regulators prosecuted a taxi company over anti-competitive conduct. They have pursued a franchise company. They prosecuted a not-for-profit Christian charity over the misrepresentation of services offered for young women with drug or eating problems.
“Clearly no business should consider themselves safe from regulator investigation.”
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