D&O in the UK will continue to have soft rates, says Marsh
Marsh today warns that highly-leveraged firms will face extra scrutiny when they apply for directors’ and officers’ (D&O) insurance in the UK.
The pressure could be so great, some firms could even struggle to get full coverage.
However, Marsh expects pricing, capacity and coverage conditions to remain favourable for many corporates for the remainder of this year, with some firms continuing to secure pricing reductions.
Adrian Jenner, a senior vice president in the financial and professional practice at Marsh, said: “With the exception of financial institutions, UK D&O insurance rates are continuing to drift downward, albeit at a much reduced rate compared with several years ago.
“However, insurers are applying greater scrutiny to financially stressed or highly leveraged companies, which may result in higher premiums and some firms even having trouble finding adequate coverage in the second half of 2012.
“Changing market conditions call for tougher negotiations. Companies need to give themselves adequate time to be prepared for renewal.
“Clear communication among all relevant parties should be made in good time and boards should not be afraid to test different policy structures and the quality of their risk and renewal information.”
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