As we look to forecast the state of the D&O marketplace in 2019, there is plenty of data to review and much of it is noteworthy. If 2017 was a year in flux, then 2018 began to turn the corner into a market with dramatically more underwriting discipline and backbone than anything in the previous 10 years outside of the financial and homebuilding sectors during the most recent financial crisis.
Our view of 2019 includes the following thoughts: 1) a new breed of plaintiff attorneys are focused on operational and event-based claims, which will continue to rise toward an importance last felt in the 1990s; 2) the newer D&O claim activity will include more claims against medium-sized public companies, cases dismissed more often, higher relative settlements when cases are not dismissed, and higher defense costs connected to the smaller settlements; 3) merger-objection claims will continue to be brought in federal courts with increasingly higher costs. Carriers will respond with demands for higher premiums in order to address the current health of their books, and we must be prepared.