European D&O Market Primed for Robust Growth, according to Advisen Report
New laws put corporate directors at risk, sparking demand for protection.
New York (Nov. 9, 2009) – Directors of European companies are more likely than ever to be sued by disgruntled shareholders, according to a new report from Advisen Ltd. As a result, directors and officers liability (D&O) insurance is one of the fastest growing insurance products in Europe, and sales will continue to increase at a brisk pace in the coming years.
Accounting scandals and corporate governance shortfalls have led to new laws across Europe requiring greater transparency and heightened shareholder protections. Additionally, legal systems have been reformed to give shareholders unprecedented access to the courts. These governance and legal reforms expose directors to greater liability, and lawsuits naming companies and their directors have increased throughout Europe. Some recent suits have settled for hundreds of millions of Euros.
"The United States is still the world’s preferred venue for litigating shareholder lawsuits, but more and more suits are being brought in European courts," said John Molka III, the author of the report. "Increasingly, directors of European companies are demanding insurance protection. The US D&O market has shrunk during the recession, but premium volume is up sharply in Europe."
Securities regulators across Europe have stepped up enforcement activities in recent years, further exposing corporate directors to liability. Regulators across the globe are sharing information and coordinating investigations, putting additional pressure on multinational corporations. Investigations and other enforcement activities not only are costly for companies, they also can spark shareholder suits.
"Underwriters clearly are concerned about the heightened exposure to claims, but at the same time the threat of regulatory investigations and shareholder suits is creating unprecedented demand for D&O insurance," observed Dave Bradford, executive vice president of Advisen. "Most of the largest European companies now buy coverage, and a growing number of mid-size firms are recognizing that they too are potential litigation targets. We expect to see double-digit growth in D&O premium volumes in the coming years, driven by both rate increases and a windfall of new companies seeking to purchase D&O insurance."
Advisen’s 20-page report, European D&O Insurance Market to Benefit from Governance and Legal Reforms, tracks the latest developments in legislation, regulation and litigation reform across Europe, and shows how the rapidly shifting management liability landscape is transforming the D&O market. It offers management liability brokers and underwriters a unique pan-European perspective on the D&O market, while presenting actionable information on a country-by-country basis for marketing, sales, product development and strategic planning purposes. The report is essential reading for risk managers of any company with European operations to understand the emerging liability picture and how the rapidly escalating risks faced by their firms’ directors and officers vary by country.
European D&O Insurance Market to Benefit from Governance and Legal Reforms can be purchased for $499 at The Advisen Corner, http://corner.advisen.com/reports_topical_european_do.html.
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About MSCAd™
Advisen tracks significant lawsuits filed against companies and their directors and officers throughout the world in its Master Significant Case and Action Database (MSCAd™). MSCAd™ is the most complete and accurate database of its type, consisting of almost 40,000 events and over $900 billion in aggregate losses. Securities cases in MSCAd™ represent almost 6,000 events and over $80 billion in aggregate losses.
Advisen’s MSCAd™ covers a full range of shareholder suits and other securities cases, categorized by type of suit. Lists of suits and filing details are available at Advisen’s online store, Advisen Corner, at http://corner.advisen.com/analytics_mscad.html. MSCAd™is accessible by Advisen members through their advisen.com logins. For more information please call +1.212.897.4800 in the US or +44(0)20.7929.5929 in London, or e-mail corner@advisen.com.
About Advisen
Advisen integrates business information and market data for the commercial insurance industry and maintains critical risk analytics and time-saving workflow tools for over 530 industry leading firms. Through its work for the broadest customer base among information service providers, Advisen delivers actionable information and risk models at a fraction of the cost to have them built internally. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry’s deepest data sets with proprietary analytics and offers insight into risk and insurance that is not available on any other system. Advisen is headquartered in New York. For more information, visit http://www.advisen.com or call +1.212.897.4800 in New York or +44(0)20.7929.5929 in London.