Public D&O renewal rates fall again

Directors and officers liability insurance rates for publicly traded companies fell by double digits in the fourth quarter of 2023, according to a report by Aon PLC released Monday.

The average cost of $1 million in limits decreased 17.5% compared with the prior-year quarter, Aon said.

The decrease represents the seventh consecutive quarter of annual public D&O rate decreases, following sharp rate hikes between late 2018 and 2022.

Renewals in the fourth quarter included several programs for policyholders with prior-year initial public offerings and so-called de-SPAC transactions, or alternative IPO deals, which decreased 45.9% and 37.2%, respectively, as the policies renewed further away from the original transaction.

Excluding IPO and de-SPAC policyholders, D&O pricing fell 14.4% in the quarter.

Looking at primary policies that renewed with the same limit and deductible in the fourth quarters of 2022 and 2023, 80% saw price declines, 13% renewed flat and 7% saw increases, the report said. The average rate change for all the policyholders in the category was a 10% decrease.