1.1
D&O Market Update
Rates for Public Companies
Each company’s risk profile is unique; yet, clear pricing trends emerge when viewed by industry and market cap segments. While most companies received price relief, technology and life science sectors, as well as mid ($2B–$10B) and large ($10B+) market cap companies experienced the highest percentage of increases. This is an intuitive result given that these are the same segments facing a higher volume of securities class action filings, a point we’ll discuss further in this section.
All Public D&O Client Segments Saw Insurance Cost Reduction
Public D&O Annual Cost Change by Business Segment in 2H 2024 and 1H 2025*
The favorable buying conditions we see now are largely driven by basic supply and demand dynamics. On the one hand, today’s D&O market is awash with abundant capacity and carriers eager to retain their layers and get onto new programs. On the other hand, there’s a shortage of insurance buyers, at least in part due to a lackluster IPO market. As was well documented, during the peak of the hard market, new capital and entrants flooded the D&O market. This fueled competition and gave buyers much-needed pricing relief.
Following a record-breaking year for IPOs in 2021, the market experienced a significant drop in IPO activity. Rising interest rates, increased market volatility, inflated valuations, and broad economic uncertainty continue to keep many new listings on the sidelines. Following feeble IPO years from 2022–2024, there was optimism that 2025 would open the way for a strong IPO window. While there have been notable and high-profile IPOs so far this year, 2025 has not produced the deluge of IPOs many hoped would arrive.
As reported in this year’s edition of our Woodruff Sawyer Guide to D&O Insurance for SPAC IPOs, after a long cooling-off period, special purpose acquisition company (SPAC) IPOs are making a comeback. While this is an encouraging sign for companies seeking a more flexible pathway to public markets, overall deal volume and the capacity required remain low. As a result, like traditional IPOs, an improved SPAC environment will not significantly shift the demand side in the D&O insurance marketplace.
With abundant supply and limited demand, the imbalance will continue to benefit D&O insurance buyers for SPAC IPOs through the rest of 2025 and into 2026.