Jimi Hendrix famously sang in All Along the Watchtower: “There's too much confusion, I can't get no relief.” If you have been watching the directors and officers (D&O) landscape, the last year has been a confusing haze of activity. If we take a closer look, some patterns emerge that are understandable. Other developments are so new that we don't know if they are patterns, trends or idiosyncratic currents.

For carriers struggling with the continuation of soft D&O markets, there is little at the outset of 2018 to offer assurance of direction. The thin mix of possible market advantageous developments juxtaposed with market softening trends leaves many carriers with early conclusions that 2018 will be another year in which they “can't get no relief.” In addition, the D&O market is evolving as headline losses and technology present new risks. However, let's explore what we know, where we are, and why 2018 portends continued uncertainty.

Crossing the Delaware (state court line) into Federal Courts

It shouldn't be news that the biggest trend of 2016 and 2017 was the bomb cyclone of securities class action filings. Spiking securities class action filings was perhaps the biggest buzz of the last 24 months. If you missed the news, here is the data: In 2017, approximately 400 securities class actions were filed.

Close to 300 actions were filed in 2016. These filings outnumber all filings for the prior 20 years with the exception of a single year, 2001, when IPO laddering cases ballooned to nearly 500. In early 2016, everyone stayed riveted to the quarterly statistics to see if filings would remain high. Then, as 2016 closed, the question was whether the filing frenzy would continue. It did.