Airmic 09: New D&O data revealed

Airmic and Advisen, the international supplier of benchmarking services, have produced detailed aggregate data of D&O insurance programmes purchased by risk managers.

Airmic claimed it is the first exercise of its kind ever in the UK, with 277 Airmic members taking part.

The survey follows an announcement by the two organisations in April 2008 that they would collaborate to enable insurance buyers to compare themselves with their peer groups.

The aim now is to conduct similar exercises with other major lines of business and to repeat the D&O benchmark next year. Advisen are also responsible for the RIMS (Risk and Insurance Management Society) benchmarking survey in the United States.

The survey shows that Airmic members are responding to an increasingly hostile shareholder litigation environment with substantial D&O programme limits: about 25% of companies that responded said they bought £100 million or more D&O coverage. Those with exposures in the USA took bigger lines on average than the others.

Chemical, natural resources and pharmaceutical companies paid the highest estimated average annual D&O premium (£13.2 million), though the figure was influenced significantly by one company that paid a very large premium. The financial services sector emerges as the second biggest spenders with an average of £12.4 million.

“This survey and future surveys like it will be of immense value to our members,” said Airmic chief executive John Hurrell. “Whilst the individual circumstances of each organisation will differ, the information is enough to give buyers a good starting point in their negotiations with underwriters.”

"We at Advisen are delighted to partner with Airmic on this important project," said Tom Ruggieri, president and chief executive. "UK companies and their directors are increasingly exposed to suits by shareholders and other stakeholders. Good benchmarking data enables risk managers to make better informed decisions about their D&O insurance programmes."