News

Australia underpricing D&O liability, says Zurich

News >> Directors and Officers Liability

Claims exceed premiums from directors’ and officers’ (D&O) liability policies in Australia, but the market will remain soft due to the amount of competition, says Zurich’s Global Chief Underwriting Officer for D&O Liability and Financial Institutions, Paul Schiavone.

He says rates keep falling here despite claims exceeding total premium income of around $200 million.

“This is a challenging market,” he told a seminar in Melbourne last week. “Are we pricing the risks correctly in Australia? I would say no.”

Mr Schiavone told the 2011 Zurich Financial Lines Forum that as many as 25 carriers write D&O in Australia, with European and US companies entering the market due to perceived profitability. But he says this is true only for excess cover, not for primary layers.

The market is “very dynamic” because of the competition, but while Australia leads the world in product innovation, it is also unique for the number of very large claims. Mr Schiavone says it is the top market for D&O litigation after the US.

He says policies keep getting broader, and terms and conditions would usually be curbed in a hard market. “The next hard market will focus purely on price.”

Mr Schiavone says new inclusions are covering raids by regulators, when legal costs are incurred before any wrongdoing has been alleged.

Emerging risks include global shareholder litigation and regulatory actions resulting from increased legislation.

Although large shareholder litigation cases dominate claims, followed by employment and regulatory actions, he notes D&O business includes many smaller-level claims that can mount up.

He says global companies are increasingly looking for international D&O programs, but it requires skill to navigate the differing requirements among jurisdictions. 

Terry McMullan
Publisher
insuranceNEWS  .com.au

Last changed: Aug 15 2011 at 2:32 PM

Comments

  1. None Found

Add Comment

Latest News

Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

read more

CPR Insurance wins Brokerage of the year

CPR Insurance Services picked up the award for the Best Brokerage (1-5 staff) in Australia, last Friday Night (4th May 2018) at the Insurance Business Magazine Awards held at the Westin in Sydney.

Judging came from various parts of the industry. It is a great honour to be recognised for our hard work and particular Business values we follow. A full list of winners is listed here.

Success comes from having great staff, and we thank Aidan Harmer and Julia McLauchlan as important support staff for helping us win such an award.

CPR Insurance has been in operation for more than 7 years now and is only successful because of the wonderful support from our staff, insurers and most importantly, our fantastic clients who put their faith and trust into our company to be their Risk Advisers and Brokers. 

Thank you to all.

read more