The D&O market has seen significant volatility over the last decade, with rates climbing to all-time highs in 2021 and early 2022, only to fall even faster thereafter. The current rate environment has been a relatively stable one, but it’s not clear whether this will persist.

Two main factors drive D&O pricing outside of a company’s own unique risk factors (e.g., being a new public company versus a mature one, etc.). First is the supply of insurance capital itself. Currently, we are in an environment where there is arguably an oversupply of D&O insurance capital, as carriers entering an overheated market is what caused premiums to fall. The other factor that drives D&O insurance premiums is the litigation environment. In 2024, we saw a second consecutive year of increased securities class action litigation, and 2025 may exceed 2024. Settlements of securities class action suits are also trending in the wrong direction. The industry saw all-time highs for average and median settlements in 2024, and the number of unresolved cases (while not an all-time high) is also growing. Unless these trends reverse, buyers should not expect current favorable premium levels to persist over time.