Author: Priya Cherian Huskins
Market commentary described in this piece was provided by participating underwriters as part of this survey and reflect their individual perspectives. These views do not necessarily represent Gallagher's views.
Insurance brokers make predictions about the insurance market all the time. But where do D&O insurance underwriters see the market headed in the coming year? Are they optimistic, pessimistic or something in between? They are, after all, the folks who are actually holding the keys to their capital.
In the 10th annual Underwriters Weigh In™ Survey, Gallagher surveyed more than 35 public company D&O insurance underwriters to discover the answer to this question.
D&O insurance buyers have enjoyed and become used to a relatively softer market. The party can't last forever. In the coming year, underwriters expect some pressure on pricing, but certainly no one is calling it a hard market.
However, the experience won't be uniform. Mature public companies may see stable retentions, while newly public companies could face more pressure.
We previously analyzed underwriters' opinions on the D&O liability threat landscape. In this article, I'll highlight more survey findings, focusing on underwriter predictions for the D&O insurance market.
Underwriters expect rates to increase, but a hard market may be avoidable
Seventy-three percent of underwriters surveyed expect D&O insurance rates to increase in the coming year, compared to 27% who expect rates to remain flat.
These projections reflect a dramatic change from the prior year, in which only 33% of underwriters expected rates to increase, and a few respondents even thought prices might still go down.
Underwriter commentary points to several factors that could put pressure on D&O insurance pricing.
One respondent noted that rates haven't kept pace with rising market caps and settlement values. Another pointed out that with worsening loss experience, carriers may exit the market.
In 2018, the responses to this question predicted the onset of the hard market the following year. However, the data and commentary in this year's survey don't necessarily mean a true hard market is on the horizon.
In fact, market competition may protect insureds from a true hard market in the near term, as indicated by the response to the question, "Will you quote the primary layer for most public companies?" Ninety percent answered "yes."
In other words, we should still expect to see solid competition for the primary layer in 2027.
Retentions remain stable
Eighty-eight percent of underwriters expect D&O self-insured retentions (SIRs) for mature public companies to stay the same, while 12% expect increases.
Despite stability, some underwriters see rising legal and defense costs as a source of future pressure on retentions or rates — or both:
- "We have all read the news about the increase in rates for corporate attorneys. Those costs will need to be passed on through deductibles and higher rates."
- "While I think retentions will largely stay the same, a rational market would say they should go up. Defense cost inflation is eroding policy limits at an ever-increasing pace when primary insurers often price based on MTD assumptions."
Newly public companies may face a different market
For public companies that have gone public within the last three years, underwriters paint a slightly different picture than the one for more mature companies.
While 59% of public company D&O insurance underwriters expect SIRs to remain the same for newly public companies, 39% expect increases.
The percentage of underwriters expecting SIRs to climb is notable compared to prior years. In 2024, 12% expected increases; in 2025, that number was 23%; and now in 2026, it's up 16 percentage points to 39%.
This trend could signal growing tension between underwriters trying to rationalize their attachment points and brokers attempting to meet client expectations.
Carrier quality and relationships may matter more than price
The final question of the survey asked underwriters: "What do you wish you could tell D&O insurance buyers about 2027?"
The underwriters did, indeed, weigh in.
Their comments suggest that buyers should look beyond short-term premium savings when evaluating the long-term value of their D&O programs.
The participating underwriters' comments touched on everything from carrier quality and stability to relationships and a focus on :
- "Seek stable partners with good claims-paying reputations rather than defaulting to price."
- "The longer irrational pricing is supported, the more uncomfortable price normalization will be."
- "We don't think we've seen the last of distressed carriers or syndicates leaving the market. Choose wisely."
- "While we understand that buyers of D&O insurance need to be fiscally responsible, they also need to appreciate the symbiotic relationship between the carriers and their clients. A less-than-healthy premium base in the industry will eventually lead to bad outcomes for both the carriers and the insureds. Also, buyers need to understand that not all carriers are created equal and a continued flight to quality is in their best interests."
- "Do not walk from long-term relationships to save small amounts of premium, as it becomes very difficult to justify getting back on a risk that is underpriced — insurance carriers often underprice their own renewals to support relationships. Choosing premium savings over relationships often costs more in the long run."
As we head into 2027, D&O rates are under some pressure, but competition and capacity could keep the market from hardening.
D&O buyers are well served when they work with experienced brokers who have seen multiple market cycles and can help balance price with carrier strength and claims-paying ability, as well as the points the underwriters themselves have articulated through the survey.
As these market conditions evolve, working with an experienced D&O insurance broker can help companies balance costs with the protection they need.
