1st September 2026
MID-YEAR D&O STATE OF THE MARKET 2026
Competitive market conditions continue to create opportunities for many financial services firms, although insurers are becoming increasingly selective. Organisations that can demonstrate strong governance, financial resilience and effective risk management may be best positioned for favourable renewal outcomes.
The D&O market remains favourable for clients across most regions, but the cycle is beginning to shift. Over the past 24 to 36 months, clients have focused on optimising programmes, securing rate reductions, broadening coverage, improving structures and, in many cases, increasing limits to reflect growing company valuations and a favourable pricing environment. As pricing stabilises, the market is now moving from optimise to protect.
In this phase, competition remains intense, and the market remains price-sensitive, but pricing in some areas is testing insurers’ technical rate adequacy. As a result, insurers are increasingly focused on protecting technical rate, maintaining portfolio discipline and deploying capacity sustainably. This does not signal a hard market, and rate decreases may remain available for certain risks. However, further reductions are likely to be more selective and less uniform, with outcomes increasingly dependent on risk profile, claims experience, sector, financial performance and programme structure.
For clients, this is an important window to review programme quality, protect coverage gains, secure stable capacity and build in flexibility before conditions become more challenging. The strongest outcomes will come from early engagement, clear underwriting information and a focused strategy around pricing, coverage, capacity and insurer selection.
REGIONAL INSIGHTS: KEY MARKET HIGHLIGHTS
UNITED STATES
- Rate reductions may still be available for well-performing financial institutions, although insurers are becoming more selective where pricing has already materially corrected or where concerns exist around exposures, claims activity or sector-specific risks.
- Some US carriers are increasingly relying on facultative reinsurance to support capacity, which may affect flexibility around extensions, mid-term changes and renewals.
- In certain placements, London markets may provide an alternative or complementary source of capacity, offering additional flexibility for larger, more complex or multinational programmes.
UNITED KINGDOM
- Rate reductions remain available but are generally moderating, with insurers placing greater emphasis on underwriting discipline and risk quality.
- Financial resilience remains a key area of focus, including liquidity, refinancing risk, debt servicing costs and profitability.
- Firms experiencing restructuring activity, financial pressure or heightened governance exposures may face increased underwriting scrutiny.
EUROPE
- Capacity remains widely available across European markets, supporting competitive conditions for many financial services firms.
- Insurers continue to focus on claims experience, governance standards, financial performance and sector exposure when assessing risks.
- For larger or more complex programmes, London may offer additional capacity or programme flexibility depending on risk profile and insurer appetite.
AUSTRALIA
- Competitive conditions continue as domestic and international insurers seek to maintain or grow market share.
- Ongoing claims activity remains an important consideration, influencing underwriting and pricing decisions.
- For certain placements, London insurers may offer broader terms or more tailored solutions, particularly for organisations with complex or multinational exposures.
CLAIMS AND EMERGING RISK ENVIRONMENT
Claims activity is becoming a more important part of renewal discussions. Insurers increasingly focus on securities’ litigation, insolvency risk, employment practices exposure, regulatory investigations, cyber governance and AI-related disclosures.
While this has not yet materially changed the market’s overall competitive position, it is contributing to greater underwriting discipline. Independent research indicates that US securities class action filing activity increased during the first half of 2026 and is running ahead of both 2025 levels and long-term averages¹.
At the same time, AI-related litigation continues to accelerate², and global insolvency levels remain elevated³. Together, these trends are reinforcing insurer focus on governance, disclosure controls, financial resilience and emerging risk management. The best outcomes continue to be achieved by companies that clearly articulate their financial position, governance framework, disclosure controls and approach to emerging risks.
1“Mid-Year 2026 Securities Litigation Update”, The D&O Diary, Jun 2026.
2“AI-related Securities Litigation,” Charles River Associates, Jul 2026.
3“Global Insolvency Report,” Allianz Trade, Apr 2026.
OVERALL MARKET OUTLOOK
D&O conditions are likely to remain favourable for clients for the foreseeable future, even as the pace of rate reductions slows. The market is moving from broad-based softening towards a more stabilised environment, with outcomes increasingly driven by risk quality, claims experience, sector, financial performance and programme structure.
Capacity remains available across most regions, but insurers are showing greater discipline in pricing, line size and terms. In a highly competitive and price-sensitive market, the focus is increasingly on protecting technical rate adequacy and deploying capacity sustainably. As carriers become more selective, clients that engage early and present a clear underwriting story will be best placed to secure stable capacity, competitive pricing and durable coverage.
London remains the most compelling where clients are seeking broader coverage, controlled capacity, flexible programme structuring, innovative solutions and an alternative to local market constraints. Clients can use London to both compete with and complement local market offerings.
WHAT THIS MEANS FOR CLIENTS
Current conditions still support strong outcomes, but strategy should now be more targeted. Rather than focusing solely on further rate reductions, clients should use this window to review:
• Overall programme structure
• Limit adequacy
• Side A protection
• International programme coordination
• Excess layer pricing
• Coverage enhancements
• Insurer panel strength
• Use of POSI or ring-fenced solutions, where appropriate
• Flexibility around extensions and mid-term changes
• London is particularly relevant in this environment, especially where local markets are constrained by pricing pressure, line size, facultative reinsurance or restrictive coverage positions.
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