The public D&O market has not been this competitive since the hard market ended. Premiums are falling, carriers are broadening terms, and clients are getting more coverage for the same spend. But the claims picture has not followed the pricing signal. Filings rose 30 percent in the first half of 2026 compared to the prior six months, according to Cornerstone Research. Beyond the volume, the type of litigation driving the claims mix has also shifted.
Paul Manguson (pictured), public D&O product manager at Travelers, explains what both trends mean for brokers advising public companies. He covers the filing environment, the litigation themes driving severity, and the limit adequacy opportunity the current market creates.
Securities litigation has always followed the corporate story of the moment. For Manguson, that pattern makes the current environment easy to read.
"Securities litigation tends to cluster around whatever event or theme is dominating the corporate landscape at the time," he said. "COVID drove one wave. The SPAC boom drove another.
"Right now, we're seeing emerging and evolving technology as the next driver of litigation. Technology-related securities lawsuits are already on pace to exceed all of 2025's total in just the first half of this year."
Cornerstone Research's 2026 midyear assessment supports that read. AI-related filings reached 15 in the first six months of the year. That figure nearly matches 2025's full-year total of 16, and the technology sector overall saw filings jump from nine in the second half of 2025 to 24 in the first half of this year. The largest share centered on AI development, followed by data centers and AI hardware.
Manguson also pointed to a concurrent shift in litigation theory. "Market-manipulation theories like pump-and-dump allegations have increased as well," he said.
Plaintiffs filed eight such complaints in the first half of 2026 alone, based on Cornerstone Research data. Two had been filed in late 2025. Nine of the 10 targeted non-US issuers, and most were filed in the Second Circuit.
Filing volume is only part of the picture. Severity also is rising.
"Average settlement values hit a decade high in the first half of 2026, up sharply year-over-year," Manguson said.
NERA Economic Consulting puts that figure at $54 million. That represents a 32 percent increase over 2025's inflation-adjusted average of $41 million and the highest since 2017.
"The median settlement, a steadier measure, held flat compared to last year, but that flat figure is itself notably above the range we saw for most of the prior several years," Manguson said.
The average and median do not move the same way. The average climbs when large outlier cases settle. The median reflects what a more typical public D&O case costs, and that baseline has shifted up. NERA puts the H1 2026 median at $18 million, compared to a historical median of $13 million between 2017 and 2025, according to Cornerstone Research.
Derivative litigation accounts for a portion of public D&O exposure that federal counts do not track.
"Derivative litigation is the hardest segment to quantify," Manguson said. "These cases are filed mostly in state courts, without the kind of unified national tracking that exists for their federal court filed securities class action counterparts.
"For years, derivative suits were typically settled through corporate therapeutics such as non-monetary governance reforms, board changes, etc. That's still a common outcome, however, monetary settlements have grown substantially larger over the past several years."
Public D&O premiums have been falling for several years. Capacity has grown and competition has increased. The pricing trend is already well understood by most brokers advising public companies.
The less obvious shift is in policy language. "Competition is pushing carriers to broaden terms, not just reduce premiums, and that's generally good for buyers," Manguson said.
Good for buyers, that is, if their broker is reading the forms. What broadening actually means varies by form. Two policies with similar premiums can respond differently when a claim arrives.
"This is where brokers add the most value - pressure-testing forms on substance, not just comparing premiums," Manguson said.
The convergence of higher filing frequency, elevated settlement costs, and competitive pricing creates a specific opportunity. Many public company clients are carrying the same limit they bought during the hard market. Their public D&O exposure may have grown since then.
"Today's combination of rising market capitalizations, elevated filing frequency, increasing defense expenses, and increased settlement costs, creates an opportunity clients shouldn't overlook," Manguson said.
"Market capitalization is a central input into how securities case damages get modeled. Larger companies carry greater potential loss exposure, and with today's more competitive pricing compared to the hard market, many clients can often buy more limit for the same spend."
