The following is a press release from Fitch Ratings:

Fitch Ratings-Chicago-26 April 2018: U.S. Director and Officers (D&O) liability insurance underwriting results deteriorated in 2017 to the worst level since 2011, according to Fitch Ratings in a new report.

D&O is a more volatile product line than many other property/casualty (P/C) products. Claims traditionally arise out of matters that lead to securities litigation for public companies. Claims risk in private and non-profit organizations expanded in recent years. Several emerging risk areas are a concern for future D&O exposures, including cyber risks and employment practices. Risks of greater personal liability for an organization's senior management and directors from various D&O-related claims are likely to spur greater future demand for coverage.

"Some larger D&O insurers are seeing higher segment loss ratios, in part, due to the surge in federal class action suits filed last year," said Jim Auden, Managing Director, Fitch Ratings. That said, D&O underwriters are typically larger, multi-line insurers that can absorb or offset potential large losses with results from other segments. As such, 'the likelihood of D&O segment risks individually driving insurer ratings are limited outside of extreme crisis periods and events," Auden added.

Industry aggregate data from statutory supplemental filings that have recorded D&O specific figures since 2011 show annual direct written premium volume was flat again in 2017 at approximately $6.4 billion. Market premiums are virtually unchanged for the last four consecutive years, reflecting unyielding market competition.

Recent D&O pricing trends are at best flat, despite recent poorer underwriting performance and commentary from market participants on the need for rate improvement. Further weakness in performance and a visible retreat of marginal underwriting capacity in the D&O space are likely required for a shift in pricing tends to take place.

Rankings of top underwriters in D&O are relatively unchanged in 2017, with AIG (14.3% of industry direct premiums), Chubb Limited (12.2%) and XL Group Limited (10.3%) still the top-three carriers in market share. A closer look shows that both AIG's and Chubb's market share declined moderately in 2017. There are approximately 40 distinct insurance entities that wrote over $10 million of 2017 D&O premiums.

The full report, "U.S. Director and Officers Liability Market Update," is available at www.fitchratings.com or by clicking on the link.

Contact:

James B. Auden, CFA

Managing Director

+1-312-368-3146

Fitch Ratings, Inc.

70 West Madison Street

Chicago, IL 60602

Gerald B. Glombicki, CPA

Director

+1-312-606-2354

Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.