Table of Contents
1. EXECUTIVE SUMMARY
1.1. D&O market conditions are changing, as rising claims and a dynamic risk landscape impact the sector
1.2. Key findings
1.3. Critical success factors
2. MARKET DYNAMICS
2.1. Introduction
2.2. The number of companies with D&O cover continues to increase
2.2.1. Large corporates are the main holders of D&O insurance, while penetration among small and medium companies sits at around 50%
2.2.2. Penetration of D&O among SMEs is slowly growing
2.3. Premium rates started to rise in 2018, following a decade of soft market conditions
2.3.1. Market GWP has remained largely static in recent years due to high levels of price-based competition
2.3.2. The cycle turned at the start of 2018 and significant rate increases are being achieved, particularly on large corporate business
2.3.3. The D&O market is estimated to be worth £218m in 2018
2.4. D&O profitability has deteriorated, as the risk landscape continues to shift
2.4.1. Regulatory enforcement action has ratcheted up the pressure on D&O underwriting results
2.4.2. Claims frequency and severity are increasing, and profitability has taken a significant hit, particularly at the larger end of the market
2.4.3. Several high-profile cases have rocked the UK D&O market
2.4.4. The dynamic D&O risk landscape means that several recent legal changes are impacting claims experience
2.4.5. GDPR and cyber risks are a potential source of future claims
2.4.6. Acquisition costs are a continuing source of concern
2.5. Competition remains fierce, although caution is emerging
2.5.1. Competition is dominated by a small group of insurers
2.5.2. AXA is the market leader for SME D&O cover
2.5.3. Chubb and AXA are the preferred insurers for D&O placement among brokers
3. SME D&O BUYING BEHAVIORS
3.1. Introduction
3.2. While SME awareness of D&O cover is rising, cross-selling opportunities within cyber could further increase penetration
3.2.1. Awareness of D&O cover is increasing, aided by topical risks such as the GDPR, cyber threats, and health & safety
3.2.2. Insurers and brokers should take advantage of the cross-selling opportunities presented by cyber
3.3. Brokers remain the dominant distribution channel for D&O
3.3.1. SMEs require advice and recommendation before purchasing D&O
3.3.2. D&O is now offered by the vast majority of commercial brokers
3.3.3. PCWs play an increasingly important role in an SME’s first steps to buying D&O
3.3.4. Levels of true direct business remain very low
3.4. SMEs are comfortable purchasing D&O online, yet human interaction still plays an important role
3.4.1. The internet is the most popular platform for SMEs buying D&O
3.4.2. Human interaction plays an important role in the sales process, particularly for small and micro companies
3.5. Just under half of SMEs shopped around at last renewal - a figure that falls as company size increases
3.5.1. Just under half of SMEs shopped around at last D&O renewal
3.5.2. Levels of shopping around decrease with size
3.6. Add-on services are an increasingly important component of the overall D&O package
4. FUTURE
4.1. Introduction
4.2. The UK D&O market is forecast to grow at a faster rate to 2022
4.2.1. Rate increases are expected to continue over the next couple of years
4.2.2. Penetration of D&O among SMEs will continue gradually increasing
4.2.3. UK D&O GWP will show healthier growth to 2022
4.3. There are some potentially concerning indicators to watch out for in the D&O market
4.3.1. In the light of considerable economic uncertainties, insurers will be keeping a close eye on some key indicators
4.3.2. There are several additional areas that could impact the market in future
5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Supplementary data
5.3. D&O Insurance
5.3.1. Side ABC cover
5.3.2. Standalone Side A policies can be bought as a complementary product to enhance cover
5.4. Definitions
5.4.1. SMEs
5.5. UK SME Insurance Survey
5.6. UK Commercial Broker Survey
5.7. Bibliography
5.8. Further reading

List of Tables
Table 1: Method most recently used by SMEs to purchase D&O by size of SME, 2018
Table 2: D&O switching levels and behavior at last renewal by size of SME, 2018
Table 3: UK D&O GWP, 2014-22f
Table 4: PI and D&O GWP by competitor (£000s)

List of Figures
Figure 1: D&O penetration rises with company size
Figure 2: D&O penetration is slowly increasing among SMEs
Figure 3: UK D&O GWP remained largely static until 2018
Figure 4: Major factors impacting the UK D&O risk landscape
Figure 5: AXA is the market leader for SME D&O cover
Figure 6: Chubb, AXA, and Markel are the preferred D&O insurers among brokers
Figure 7: There are significant opportunities to cross-sell D&O insurance to SMEs currently only holding cyber insurance
Figure 8: PCWs play an increasingly important role in an SME's first steps to buying D&O
Figure 9: Micro and small companies are more likely to have most recently bought D&O through some form of personal interaction
Figure 10: Levels of shopping around for D&O appear to decrease with size
Figure 11: Premium rate rises will continue to boost GWP and lead to higher rates of growth for UK D&O GWP