United Kingdom (UK) Directors and Officers Insurance Market Size, Competitive Landscape, Product Analysis and Forecast, 2021-2025
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 and the impact of COVID-19. 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.
Over the last few years, the UK directors and officers (D&O) market has undergone a significant market correction. Substantial premium rate increases - facilitated by drastically reduced capacity - have driven unprecedented market growth. The sector is also traversing the economic uncertainties and impacts of the COVID-19 pandemic, which could have a significant impact on the future course of the market. While claims are emerging, there will be a lag before the true impact of the pandemic is known, particularly as government support packages are withdrawn. As the hard market gradually improves profitability, the appetite of existing insurers and new entrants is expected to increase, and competition will re-emerge.
Scope
- We estimate the UK D&O market to be worth GBP691m in 2021. Its substantial growth has been driven by extreme capacity reductions and stratospheric premium rate rises. While there are still some rate adjustments to be made during 2022, it is anticipated that by the end of the year there will be a return to flatter rates.
- Penetration of D&O among SMEs has remained largely stable. GlobalData’s 2021 UK SME Insurance Survey found that 34.3% of SMEs now have D&O (excluding sole traders), a figure that rises along with company size.
- 24.1% of SMEs have made a claim on their D&O policy as a result of the COVID-19 pandemic, with around four in fives claims accepted.
- Switching has increased among the smallest SMEs, while medium-sized companies are now more likely to have renewed after comparing prices (+7.0 percentage points compared to 2018).
- Understand the current and forecast size and growth of the UK D&O insurance market
- Gain insight into how the COVID-19 pandemic has impacted claims and product uptake
- See what impact the hard market has had on SME switching and renewal behaviors
- Benefit from GlobalData’s UK SME Insurance and UK Commercial Insurance Broker Surveys, as well as in-depth interviews with industry participants
- Get access to D&O insurer SME market shares and understand broker preferences
- Understand D&O product distribution trends
- Learn how regulatory changes will affect the shape of the future UK D&O insurance market
Companies Mentioned
AXA
AXA XL
Lloyd’s of London
Marsh
Zurich
Willis Towers Watson
AXIS
Argo
Neon
Pioneer
Chubb
AIG
RSA
Markel
Allianz
Aviva
Hiscox
Angel
Berkshire Hathaway
Beazley
Convex
Inigo
Equity Red Star
Mosaic
SCOR
Arcadian
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- Exceptionally hard conditions have driven market growth
- Table Figure 1: UK D&O GWP increased substantially through the hard market
- The number of companies with D&O cover remains stable
- Table Figure 2: D&O penetration rises in line with company size and has remained stable overall
- Table Figure 3: The proportion of small and medium companies that are first-time D&O buyers has increased
- Table Figure 4: SMEs have reconsidered their D&O holdings as a result of the COVID-19 pandemic
- Table The impact of COVID-19 on D&O policyholding considerations among SMEs, 2021
- Table Figure 5: Almost half of SMEs that canceled their D&O policy due to COVID-19 needed to cut costs
- D&O profitability may be improving, but the risk landscape is dynamic and concerns remain
- Table Figure 6: 10.1% of SMEs have made a successful D&O claim as a result of the COVID-19 pandemic
- Table Figure 7: Company insolvencies declined during the course of the pandemic, but are creeping back up
- Table Examples of regulatory and legislative changes imposing new obligations on directors
- Exceptionally hard conditions have driven market growth
- Competitive Landscape
- There have been significant shifts in appetite
- AXA remains the market leader for SME D&O cover
- Table Figure 8: AXA is the SME market leader for UK D&O insurance
- AXA is also the favored insurer for D&O placement among brokers
- Table Figure 9: AXA, Aviva, Zurich, and Allianz lead the way for D&O among commercial brokers
- Competition is starting to re-emerge
- Product Distribution
- SME buying habits have been largely unaffected by the hard market
- Table Figure 10: Brokers are the main channel used by SMEs to purchase D&O
- Table Figure 11: Micro enterprises and sole traders are more likely to buy D&O with some form of personal interaction
- Table Method most recently used by SMEs to purchase D&O by size of SME, 2021
- Switching has increased, but only among the smallest SMEs
- Table Figure 12: Medium-sized companies are increasingly shopping around at renewal but switching levels have fallen in this segment
- Table D&O switching levels and behavior at last renewal by size of SME, 2021
- Table The main reasons for switching D&O provider have changed over the hard market
- SME buying habits have been largely unaffected by the hard market
- Future of the Market
- UK D&O market growth is forecast to stabilize to 2025
- Table Figure 13: UK D&O GWP growth will stabilize after 2022
- Table UK D&O GWP, 2017–25f
- COVID-19 impacts could still significantly affect the market
- Table Economic and regulatory indicators that will impact the future of the D&O market
- Other factors that could impact D&O
- UK D&O market growth is forecast to stabilize to 2025
- Appendix
- Abbreviations and acronyms
- Definitions
- Methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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