The directors and officers liability (D&O) insurance market was sharply divided throughout 2009.  Clients with attractive risk profiles experienced robust competition for commercial risks, while financial institutions and real estate investment trusts (REITs) were still dealing with the hard-market pricing inflicted by the credit crisis. Coverage enhancements also became available in this D&O insurance market, as insurers released the restrictive provisions applied during the last hard market.

Looking Ahead

Insurers will continue to monitor the impact of the global economic downturn and credit market issues. Insureds with strong balance sheets and ample liquidity will likely see competitive pricing on their D&O insurance programs. Assuming a relatively stable economic and litigation environment, and given the ample supply of capacity, the D&O market will likely remain competitive for attractive risks, with relatively flat pricing in 2010.