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Professionally Speaking

The professional liability marketplace is a healthy segment that gives knowledgeable agents and brokers a chance to shine. Get a behind-the-scenes look at the lines from experts in their categories.

By Deb Ropelewski, CPCU, ARM | Updated on October 31, 2013
Professional liability insurance is a vibrant, interesting, and growing segment of the property-casualty insurance market. If membership growth of the Professional Liability Underwriting Society (PLUS) is any indication, the market has exploded in the last 20 years. PLUS membership, which numbered roughly 1,000 in 1993, is now close to 7,000. According to SNL Financial LLC, medical malpractice and D&O total premiums approach $16 billion, excluding other professional liability lines such as employment practices, non-medical E&O (including cyber liability), and fiduciary liability. Almost one-fourth of PLUS members are agents and brokers, most of whom are heavily involved in the professional liability arena.

Directors and Officers (D&O)

Kevin Ishizu, senior vice president and national practice leader, public D&O insurance for Wells Fargo Insurance Services, oversees a portfolio of clients ranging from IPOs to Fortune 500 companies. He said public company D&O insurance continues to be a “buyer’s market,” due to relatively low securities class action frequency, a high rate of dismissals and an abundance of capacity.

Strong carriers dominate the market, and although premium increases in the low single digits are the norm, the price per million in coverage remains low when compared to historic pricing indices, he said. Additionally, the price increases on the primary layers do not necessarily carry through to the excess and Side A DIC layers. “There appears to be a continuing theme of ‘first-to-file’ derivative litigation and merger objection cases, but the market appears to have addressed these exposures with increased retentions in lieu of imposing meaningful premium increases,” he said.

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