On average Nasdaq-listed public companies saw their primary D&O insurance premiums drop by 20 percent in 2022, with recent IPOs seeing even greater decreases
TAMPA, Fla.–(BUSINESS WIRE)–Apr. 19, 2023– BRP Group, Inc. (NASDAQ: BRP) (“BRP Group”), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial clients, today announced its second annual Directors and Officers (D&O) Benchmarking Report, revealing a steep decline in D&O insurance premiums in 2022, after several years of rate increases.
More than 350 public companies participated in this year’s survey, conducted in collaboration with Nasdaq, Inc. (“Nasdaq”). Participating companies provided key policy information regarding their D&O insurance coverage. One of the top findings reveals that after several years of significant increases in D&O insurance costs, businesses are now seeing a significant reduction in the premium and retention of their D&O coverage.
In fact, the Nasdaq-listed public companies that were surveyed, on average, saw their primary D&O insurance layer decrease by 20 percent in 2022. Recent IPOs or DeSPACs saw an average 28 percent rate decrease for their primary layer. Of all companies surveyed, recent Healthcare and Technology IPOs saw the largest decreases at over 30 percent.
One finding of note was that even in this environment of rate decreases, companies are opting for lower coverage amounts. The report found that 25 percent of companies decreased their overall limits, an increase from 2021 in which only 10 percent of companies decreased their overall limits.
“Benchmarking your limits and premium against your peers is very valuable information, especially in a time of significant rate changes,” said Mike Tomasulo, Senior Managing Partner and National Management Liability Practice Leader at BRP Group. “D&O insurance is a major budget item for public companies, especially during initial public offerings and DeSPAC transactions. As such, companies need independent limits, pricings and claims data along with a trusted advisor to help them manage these significant costs while also securing best-in-class coverage and protecting corporate directors and officers.”
Additional key findings from the report includes:
- The top three industries that continue to see the most securities claims and pay the highest rates were Healthcare, Technology and Consumer Discretionary
- On average, companies saw their total D&O insurance program costs decrease by 35 percent, driven by lower excess and A-Side rate
- Recent IPOs and DeSPACs saw their retentions drop by 40 percent
- More than 75 percent of companies surveyed saw their premiums remain flat or decrease
The report fully breaks down limits and purchasing data by industry, market capitalization and whether the company is a recent IPO or tenured public company. Additional data is also provided on the changes in rates since last year on excess and A-Side layers and identifies the most used primary carriers.
For a copy of the executive summary and information about obtaining the full report, please click here.
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BRP Group, Inc. (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.2 million clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com.
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The BRP Group Management Liability Practice and Nasdaq worked together for the second year in the row, to produce the D&O Benchmarking Report. Our process involved crafting a survey that was distributed to Nasdaq listed companies, which was designed to gather crucial information on their director’s and officer’s insurance. After receiving more than 350 completed responses, we thoroughly analyzed the data and utilized it to produce a comprehensive final report.
Anna Rozenich, Sr. Director of Enterprise Communications
Baldwin Risk Partners
Bonnie Bishop, Executive Director, Investor Relations
Baldwin Risk Partners
813.259.8032 | IR@baldwinriskpartners.com