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The current outlook on the 2023 D&O Insurance Market

Directors and Officers’ insurance, commonly known as D&O insurance, is an important type of coverage that provides personal financial protection to directors and officers of companies against lawsuits arising from their management decisions.

Historical Perspective

Historically, the D&O market was less challenging, with lower premiums, higher limits, and broad coverage offered by insurers. However in the last 5 or so years, increased claims activity, class actions, and regulatory scrutiny including a number of Royal Commissions have made the market more challenging.

Recent Challenges

D&O insurers have responded by reducing capacity (limits), issuing more stringent terms, reducing cover, and increasing premiums/retentions. This has created a challenging environment for businesses looking to obtain D&O insurance, with underwriters considering various factors before issuing a policy, including the financial stability of the company, business sector and vulnerability to an economic downturn.

2023 Outlook

The 2023 outlook for the D&O market is expected to stabilize, with occasional rollover premiums and smaller increases as the market pulls back from the harsh remediation of their portfolios. The challenging environment of the last few years has created the perfect opportunity for new entrants into the market and we are seeing more competitive tension in the space. New entrants into the market may be able to offer more competitive premiums as they are not still having to remediate their portfolios which may have suffered more claims over the last challenging period.

“The 2023 outlook for the D&O market is expected to stabilize, with occasional rollover premiums and smaller increases.”

Underwriting Considerations

There are still particular issues impacting the market, including the general economic downturn, work-from-home arrangements, work health and safety concerns, increased scrutiny from ASIC on directors’ duties, greenwashing, and share trading. Insurers want to exercise some caution when reviewing new risks to identify what the particular risk areas are for businesses and what steps the Board is taking to mitigate against those risks.

When considering whether to offer terms on a particular risk, underwriters consider several factors, these include:

• Board composition,
• Industry sector and the business cycle (start-up versus established businesses),
• Corporate governance,
• Financial information (e.g. the presence of significant debt on the balance sheet and restrictive covenants/terms);
• Foreign jurisdiction exposure.

These factors influence the insurer’s threshold decision – to offer terms or not, but also affect the terms and exclusions applicable to the policy.

Helpful Advice for Companies Seeking D&O Insurance Coverage

Helpful advice for companies seeking D&O insurance coverage includes:

• Scheduling underwriter meetings either face-to-face or via Zoom,
• Ensuring that the right business representative is in the meeting to answer questions about the business fundamentals,
• Pre-empting underwriting questions by having a good understanding of the company’s risk management framework and policies and procedures;
• Being on the front foot with cash flow forecasts and strategy updates.


Once a policy option is secured, the Board should also ask the broker questions about the policy in order to understand the general cover and any endorsements so they can query changes in cover year to year. When the broker and client understand the policy, they can consider factors that might help the insurer gain more comfort about the risk potentially broadening the cover.

The D&O market has undergone significant changes in recent years, creating a challenging environment for businesses looking to obtain coverage. However, with a better understanding of the underwriting considerations and helpful insurance broking advice, businesses can be better prepared when seeking D&O insurance coverage.

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About KBI

We are a specialist insurance brokerage with an emphasis on adding value to our clients by helping them make an informed decision. Our approach combines that of an insurance broker and consultant, where we focus on providing expert advice to our clients while customising their insurance program and risk management solutions.

Since starting in 2013, KBI is constantly growing and becoming a leader in the Australian market. Our primary point of difference is that we don’t try to be all things to all people.  We work in niche areas, where we can tailor an offering, advice and broker support to meet the specific area’s needs.

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