Advisen Loss Insight: A Midwestern management liability perspective

By Cate Chapman on May 20, 2015

The US D&O insurance market is fairly mature, with total limits of $2.72 trillion placed for premiums equal to $9.2 billion, but it is far from static. Both premiums and limits placed have increased 13 percent from 2011 to 2014, with an average 5 percent annual growth from 2012 to 2014.

In terms of the types of loss events since the mid-1990s, neither Illinois nor the MidWest stand out from the national trend: Securities class actions are by far the greatest claim event (at around 60 percent), followed by merger objection suits and derivative shareholder actions.

Growth in the employment practices sector has been higher from 2011 to 2014, with premiums and limits both rising 26 percent in that time. It is a much smaller market, however, with premiums of $2 billion supporting around $425 billion of limits placed.

Wage and Hour, which is a major discussion topic in the sector, is less of an issue in Illinois and the MidWest than elsewhere in the US. Illinois suffers most from EPL cases based on gender and sexual discrimination, followed by racial discrimination cases.

The growth in relative case count nationally for the two biggest areas of executive risk is shown from the mid-1990s. The frequency of EPL cases, in particular, surged at the end of the financial crisis in 2011.