D&O brokers urged to get up-to-date
D&O insurance brokers are under pressure to stay on top of legislative changes and precedents affecting the space. We speak to Stuart Davies of Gallagher Australia for his advice on specialising in this area.
Video transcript below:
Donna Sawyer, Insurance Business Online
Donna Sawyer: D&O insurance specialists are under pressure to keep on top of legislative changes and precedents impacting the space. Stuart Davies of Gallagher Australia says insurance brokers in D&O should pay careful attention to the recent Centro case.
Stuart Davies, Gallagher Australia
Stuart Davies: If you look at certain particular cases, such as the Centro case, Centro highlighted really an increase in risk for Directors and particularly non-exec Directors in terms of their responsibilities and duties with regard to being able to understand the company affairs and also their financial statements and really not being able to suggest that they have the ability also to be able to sign off on them and ensure they are correct.
Donna Sawyer: He says one of the biggest challenges for D&O Insurance Brokers is to stay abreast of the changes in the constantly evolving specialisation.
Stuart Davies: One of the key challenges is just keeping abreast of all these changes. And not only just keeping abreast of them but quite often once they come into fruition, is really understanding their impact upon the D&O and then being able to guide our clients through that. Because ultimately we can’t rely upon the insurers necessarily to provide that guidance. I mean insurers are there to provide protection through offering products, but at the same time they are also there to protect their capital. So we need to insure that the terms of those policies that we are putting in place for our clients are cognisant of any changes in legislation as much as they possibly can be.
Donna Sawyer: While more companies aren’t necessarily purchasing D&O insurance, the real opportunity for brokers is increasing the amount of coverage companies have.
Stuart Davies: Well I think we are seeing most growth is actually in limits. So the market has an abundance of capacity. There are still soft rates out there. Therefore, capital can be bought at a competitive rate. So what you are finding and certainly we are working for lot of our clients to do so is to challenge the limits of their buying and really start to analyse in terms of what those limits are there to respond to. I think that’s where you will see most growth, where boards and senior execs are starting to challenge what they buy.
Donna Sawyer: This is Donna Sawyer reporting for Insurance Business Online.