UK Directors’ & Officers’ Insurance Market 2024 Summary The report provides in-depth analysis of the UK directors' and officers' insurance market. It looks at market size as well as changes in premiums, claims, distribution, regulation, and future opportunities, including our proprietary GWP forecasts. The report uses results from our annual UK SME Insurance and UK Commercial Insurance Broker Surveys, as well as additional in-depth interviews with industry leaders. UK directors’ and officers’ (D&O) insurance gross written premiums (GWP) continued to shrink in 2023. Over the last few years, conditions in the market have shifted. Competition and capacity have increased, as the market correction over 2019-21 improved profitability and the anticipated wave of COVID-19-related claims failed to materialize. As a result, premium rates have declined for large corporates, and softer market conditions are also in evidence for SMEs. However, falling prices are occurring during a period of significant economic headwinds, with growing risk exposures gathering on the horizon. These could have a significant impact on the future course of the market. Underwriters are therefore not expecting a return to lengthy soft market conditions, and prudence will ensure a return to growth by 2026. Scope - The proportion of SMEs with D&O continues to gradually increase. GlobalData’s 2023 UK SME Insurance Survey found that 39.9% of SMEs now have D&O (excluding sole traders), a figure that rises along with company size. - However, SMEs are re-evaluating their D&O holdings as a result of cost pressures; a quarter of medium-sized D&O policyholders and 20.8% of small companies are currently considering or have considered canceling their policy. - As competition and capacity return to the D&O market, switching levels have increased, rising to 13.3% in 2023. Meanwhile, the proportion of SMEs that renewed with their existing provider after comparing prices increased substantially (+5.9 percentage points [pp]) compared to during the hard market in 2021. Reasons to Buy - Understand the current and forecast sizes and growths of the UK D&O insurance market - Gain insight into the impact of the softening market on SME switching and renewal behaviors - Discover the SME market shares of the leading UK D&O insurers and understand broker preferences - Learn about key distribution trends in the market
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- Soft market conditions have led to a drop in market size
- Table Figure 1: D&O GWP is declining, following significant hard market growth
- Table Figure 2: Marsh's insurance index reveals that UK D&O premium rates have declined since Q1 2022
- D&O profitability was boosted by market correction, but the sector is facing uncertain headwinds
- Table Figure 3: Company insolvencies have risen substantially since 2021
- Table Figure 4: Financial concerns are top of the agenda for UK SMEs
- The number of companies with D&O is growing, but cost pressures are impacting product holding
- Table Figure 5: D&O penetration rises with company size, although there was a slight decline among mediumsized SMEs
- Table Figure 6: Medium and small companies are most likely to be re-evaluating their D&O holdings as a result of cost pressures
- Table Impact of cost pressures on the D&O policyholding considerations of SMEs, 2023
- Soft market conditions have led to a drop in market size
- Competitive Landscape
- Appetite and capacity have returned to the D&O market
- AXA remains the market leader for SME D&O cover
- Table Figure 7: AXA is the leading UK SME D&O insurer
- Table Figure 8: AXA, Aviva, and Zurich lead the market across all sizes of SME
- AXA is the most favored insurer for D&O placement among brokers
- Table Figure 9: AXA leads the way for D&O among commercial brokers
- SME Purchasing Behavior
- SME buying habits have been largely unaffected by changing market conditions
- Table Figure 10: Brokers are the main channel used by SMEs to purchase D&O
- Table Figure 11: While the internet dominates for all SMEs, smaller SMEs are more likely to buy D&O following personal interaction than mid-sized companies
- Table Method most recently used by SMEs to purchase D&O by size of SME, 2023
- Switching has increased as competition returns
- Table Figure 12: Almost four in 10 SMEs have been with their D&O provider for less than three years
- Table Length of time SMEs have been with their D&O provider, 2023
- Table Figure 13: D&O switching levels have increased among SMEs
- Table D&O switching levels and behavior at last renewal by size of SME, 2023
- Table Figure 14: Price, cover, and added risk management services are increasingly important drivers of switching for SMEs
- Legal services are the most sought-after added-value service
- Table Figure 15: A significant proportion of SMEs with D&O would like risk management services from their insurance provider but are not currently receiving them
- Table Figure 16: Legal services are the most sought-after added-value service by SMEs with D&O
- SME buying habits have been largely unaffected by changing market conditions
- Future Dynamics
- UK D&O market growth will be impacted by softening conditions
- Table Figure 17: UK D&O GWP will stabilize to 2028
- Table UK D&O GWP, 2019-28f
- The evolving risk landscape will be under intense scrutiny
- Table Economic indicators that will impact the future of the D&O market
- UK D&O market growth will be impacted by softening conditions
- Appendix
- Abbreviations, acronyms, and initialisms
- Methodology
- Definitions
- Secondary sources
- Further reading
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