Uk Directors and Officers Insurance Market Size, Share, Emerging Opportunities, Strategies, Drivers, Outlook and Competitive Landscape

UK Directors and Officers Insurance Market Size, Share,
Strategies, Drivers, Outlook and Competitive Landscape:
Radiant Insights
Summary
The UK directors and officers (DandO) insurance market has begun to stabilize following a period of growth. It was
worth £199.8m in 2015, down 0.5% from 2014. Rates are softening, with the steepest declines at the larger end of
the market due to overcapacity driving competition. On average rates are estimated to be falling by 3-5% per year.
However the market is still highly profitable, with the COR expected to lie between 60-80%. Despite rates falling,
the value of the market is stable due to increasing penetration within the SME market. DandO cover among large
corporate organizations is near full capacity, so now the market has turned its focus on increasing penetration
within the SME market - where over a third now hold the product.
However, there is still great potential for brokers and insurers to grow in the SME space, by increasing awareness
of the product and its importance. DandO claims for insurers are low-frequency but high-severity. The financial
crisis has resulted in a more litigious and regulatory society, which has put more directors and officers at risk.
Claims are also related to the economic and political landscape, any negative impacts of which may generate a
greater frequency of claims. Brokers remain the dominant distribution channel, as clients still seek advice and
guidance when purchasing cover. The product itself has remained relatively unchanged, although cyber insurance
and events such as Brexit are providing insurers with opportunities to innovate and diversify. Greater change is
being seen in how the product is distributed, with underwriting processes moving towards automation. Over the
next five years the market is forecast to decline slightly to be worth £194.8m in 2020, as a result of falling rates
being marginally larger than growth seen within the SME market.
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