Directors and officers (D&O) insurance has carried a reputation for volatility in Australia. The class endured a prolonged hard market following a wave of securities class actions, COVID-related claims and regulatory investigations that drove premiums sharply higher from 2019 to 2022. Capacity contracted, limits tightened and clients absorbed increases that, in some cases, exceeded 100% at renewal.
The Australian Prudential Regulation Authority (APRA) quarterly data, released on May 29 2026, tells the story of what came next and it is more positive than the market's reputation might suggest. After years of hard-market correction, the line has found a sustainable floor and brokers should understand what that means for clients.
The D&O class has posted a positive insurance service result in every single quarter of the APRA dataset, which covers December 2023 to March 2026. The results range from $47 million (September 2024) to $171 million (December 2025), with most quarters falling between $53 million and $111 million. There has not been a single loss-making quarter in the period.
What makes this D&O result particularly notable could be that it is achieved alongside a claims line that swings dramatically. Net claims incurred ranged from negative $37 million (December 2025, where reserve releases exceeded new claims) to $93 million (September 2024) across the ten quarters. Two quarters - December 2024 and December 2025 - recorded negative claims, meaning that prior-period reserve releases generated net recoveries rather than net costs.
This claims volatility is characteristic of long-tail financial lines, where claim development can stretch over years and reserve movements in either direction are common. The consistent positive ISR across all periods reflects underwriting discipline that has held even as claims bounce around - a sign that the hard-market pricing of 2020 to 2022 built sufficient margin into the book to absorb that volatility comfortably.
Gross written premium (GWP) for the class has stabilised after the hard market peak, settling in a range of approximately $110 million to $270 million per quarter depending on renewal timing. The March 2026 quarter came in at $111 million - a low point in the seasonal cycle - while June quarters have consistently produced the highest GWP as annual renewals cluster.
D&O pricing has been softening as competition returns to the market. Insurance Business reported that Australia's commercial insurance market entered soft territory in early 2026, with financial lines included in the broader easing trend. The consistent profitability shown in the APRA data means that insurers approaching the D&O line from a position of accumulated reserves and positive recent experience - rather than the stressed position of 2019 to 2021 - have room to compete on price without immediately threatening their margins.
Richard Garside (pictured), deputy head of specialty and Head of FINPRO, Pacific for Marsh, said competition amongst insurers will continue while D&O premiums remain historically high and losses do not impact profitability.
"Marsh data shows that in 2026, the D&O pricing is 192% above 2018 pricing," he said. "At the same time, D&O claims are at historical lows - in particular securities class actions which have historically been the source of insurers’ concerns - we saw only 8 actions commenced in 2024 and 6 in 2025."
He pointed to other factors, including concerns prior to 2018 that claims from multiple years would equate to approx $1 billion in losses, far below the estimated $400 million in annual premiums.
"The Australian D&O premium pool is now well exceeding $1 billion annually and as such there is sufficient premium to fund expected losses," he said. "Many clients have also altered their purchasing of D&O programs to respond to liabilities faced by individuals rather than corporate entity exposures, deductibles are generally higher and insurers’ deployment of capital is now more conservative - all of which leads to a more stable and longer-term profitable D&O market."
For brokers, that creates a genuine opportunity. Clients who accepted large premium increases during the hard market years and who may not have challenged their coverage structure in the process deserve a review. The market now has the capacity and the appetite to provide broader cover at lower cost than was available two or three years ago.
The caveat is that the claims environment can shift. Australia's regulatory and litigation landscape remains active - ASIC enforcement, class actions and insolvency-related D&O claims do not follow a neat cycle. As Insurance Business has reported, the Australian Securities and Investments Commission's (ASIC's) 2026 risk priorities include AI governance, cyber and operational resilience - all areas where director liability exposures are evolving rapidly. A D&O policy that was appropriately structured in 2022 may not respond as expected to claims arising from AI-related governance failures in 2026.
"A policy from 2022 may not have expected to respond to an AI-governance or cyber related loss, but there were also no relevant exclusions which would have attached to the 2022 policy precluding its response," said Garside. "In 2026, these risks are better known and yet insurers, by and large, are still providing coverage."
He said any exclusion for AI or Cyber is a red flag and needs to be avoided.
"Find another insurer!" Garside said. "Even coverage “clarifications” specific to these risks are a concern as these can create unintended gaps in cover."
A D&O specialist from LMI Group said she has not yet noticed any specific changes or exclusions coming through in D&O policies, though any that emerge are likely to appear as endorsements.
The APRA data provides an unusually clear picture of a financial lines class that has emerged from a turbulent period in reasonable shape. Ten consecutive quarters of positive underwriting results is a meaningful signal of market discipline. For brokers who serve corporate and listed-company clients, the combination of improved pricing and a financially healthy market is as favourable a set of conditions as the D&O line has offered in several years.
Source: APRA, Quarterly General Insurance Performance Statistics Database, September 2023 to March 2026, released May 29 2026. All figures are in Australian dollars and based on APRA-authorised general insurers. Lloyd's Australian operations are not included
