Another Perspective of the Soft D&O Market

I like to write about D&O insurance after work-hours in a non-formal way where I can use my own voice and perspective (typos and grammar mistakes included).... so here's another one.....

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I was chatting with a friend in the insurance industry and we had a super interesting conversation about the dynamics of the soft D&O market.

Some D&O brokers and underwriters that started in the insurance game a few years ago have only gone through a hard market. What I think will be interesting is the potential learning curve for underwriters and brokers in the soft market for SMEs.?

Price, Price, Price. On the surface, everyone’s thinking that’s your key lever. You cut the price by 50%, you’re a winner. It’s very simple and sometimes an easy, potentially uneducated way of looking at the soft market - (especially when you're talking about coverage that is so critical to an individual's personal assets).

I think it's also important to remember Coverage. The coverage dynamic is going to be very interesting.

• A SME client might be exiting the hard market with sub-optimal coverage - that really was the best option at the time of placement.
• An underwriter might face pressure to decrease price and may not offer the enhancement that comes w/an AP (additional premium) OR
• the Broker may face pressure to reduce price and goes with an option that further reduces coverage.?This may be even more concerning for SMEs - where heavy coverage analysis isn't always a norm.

I think there’s going to be two waves of BORs.

The first wave will be Brokers/Producers and Insurers that are flashing the sign that says “we’ll slash pricing!”

The second wave of BORs will be led by coverage focused brokers that will tell companies… “Well, you did get a super affordable policy with your current broker, but it also doesn’t cover your main exposure…you can call it the "Used Pinto that doesn't start" of D&O Insurance Coverage… let me introduce you to the more expensive "Fully Loaded Cadillac" and if that's too expensive, I also got a "Honda mid-tier" option.”

This will be an interesting time! Who knows what will really happen..?? (how come I can't get a brown shade on this shrugging emoji...common LinkedIn!).

NOTE:?

• This blog/article?does not intend to provide legal advice or create an attorney-client relationship. You should consult your attorney in connection with matters affecting your own legal interests.??
• Opinions?expressed?are?solely?my?own and?do not?express the?views?or?opinions of my employer.
• I am not your broker and I don't know your specific insurance coverage. Please read the terms of your insurance policy or contact your broker for specifics.
• This is a casual post, there will be occasional typos and grammatical errors.?