Honan Insurance Group’s (Honan) Head of Financial & Professional Risks Henry Clark has announced the specialist department has been rebranded to Professional & Executive Risks to better reflect the group’s strength in expertise, market clout and it’s pro-active approach in supporting clients with market related issues and challenges such as Directors and Officers (D&O) insurance.
Commenting further on the announcement Henry Clark said the days of just rolling over the D&O insurance renewal is no longer an option as the sector continues to navigate a very challenging and dynamic market. Insurers applied heavy price increases across-the-board in 2018. This continued into 2019 as the number of claims and reported circumstances exceeded the total insurance premium pool by a significant margin.
“D&O is an exceptionally complicated insurance market with carriers responding assertively to claims pressure and continuing growth in securities class actions, litigation and the prospects of further action arising in 2019 and beyond”, said Henry Clark.
Once regarded as mainly being applicable to large listed entities, litigation costs arising from D&O exposures are now so great that D&O insurance has become a necessity for many businesses–regardless of size.
“The primary driver for the current hardening D&O market is the growth in securities class actions led by opportunistic law firms backed by litigation funders and predictions that further claims pressure will arise from the Hayne Royal Commission, privacy regulation, workplace health and safety and now the Royal Commission into Aged Care Quality and Safety”, continued Henry Clark.
“As a result, upward pressure on D&O premiums will continue into 2019 and beyond as insurers leave the market resulting in the current pool becoming inadequate to cover increasing and expensive claims”.
This is going to be reality for the foreseeable future affirmed Henry Clark.
Although a challenging environment, there is still flexibility in the market, but only if the right messages are communicated – and strategies are needed to demonstrate to insurers that the D&O risk is being properly considered and mitigated.
“Honan’s Professional & Executive Risks team works proactively with clients by actively engaging in relevant education and alerting them to the changing insurance environment well in advance of cover renewal. The team then guide them to establish the most appropriate strategy to reduce the impact on premium and coverage.”
- Providing Directors, the knowledge and tools to personally engage with senior management to set and manage D&O forecasts and expectations.
- Working with insureds to be proactive and commence the renewal process early, allowing time to address any surprises or consider strategies which may mitigate premium increases.
- Examining insurer selection, transparency, relationship management and adequately conveying the client’s individual risk profile in underwriter presentations to help mitigate the prevailing market issues and assist the company to stand apart during this market correction.
The Honan Professional and Executive Risks team specialises in insurance for financial institutions, professional service firms and corporate organisations. The team of experts has decades of experience offering specific industry insight and placement experience for traditional and emerging risks.
Issued by Honan Insurance Group www.honan.com.au
Mr. Joe Perri
Joe Perri & Associates Pty Ltd