In the following guest post, Francis Kean provides us with ten reasons to be cheerful notwithstanding the current D&O insurance market. Francis is a Partner, Financial Lines, at McGill and Partners. A version of this article previously was published Insurance Day. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.




In an attempt to create a counter-weight to the many industry reports, forecasts and reviews at this time of year which focus on all the reasons for doom, gloom and despondency in the D&O market and which predict more of the same for 2021, here are some much needed reasons to be cheerful, confident and optimistic.

  • The U.S. Securities and Exchange Commission filed substantially fewer new enforcement actions against public companies and subsidiaries in fiscal year 2020 (61 new actions) compared to 2019 (95 actions). This is the lowest number since 2014.Source: NYU Pollack Centre for Law & Business and Cornerstone Research.
  • Although the SEC imposed $1.6 billion in monetary settlements on public company and subsidiary defendants, slightly higher than the 2019 total, almost two-thirds of this amount came from just two actions each with settlements in excess of $500 million. Source: NYU Pollack Centre for Law & Business and Cornerstone Research
  • A Supreme Court decision in the State of Delaware and no fewer than four decisions by superior court judges in the State of California have severely limited the scope for State based securities claims against those publicly listed companies which have embedded a forum choice for securities class actions in their Articles of Association.
  • Innovative developments in the After The Event insurance market provide new litigation funding mechanisms to defend securities claims outside traditional D&O insurance limits.
  • The US Supreme Court has accepted a Goldman Sachs petition to appeal in a securities claim on issues relating to class certification which has the potential to redress the balance in the defendant’s favour in this most important battleground in defending securities class actions.
  • The UK’s Information Commissioner has dramatically reduced the size of the fine against British Airways for breaches of the General Data Protection Regulation from over £180 million to just £20 million.
  • In 2020 for the first time, Australian litigation funders (some of the most aggressive and successful in the world) fell under a mandatory new regulation and licencing regime created by ASIC  ( the Australian Securities and Investment Commission)
  • The temporary suspension in the UK of the wrongful trading legislation coupled with the most significant overhaul of the UK’s insolvency regime in decades (resulting among other things in the Corporate Insolvency and Governance Act) has greatly expanded the scope of options available to companies facing solvency threats. These include moratoria on debt collection and enhanced restructuring powers.
  • The significant increase in global D&O insurance premiums has attracted several new entrants into the market such as Convex, Faraday, Aviva, Scor, Mosaic and Arcadian. It has also sharpened the appetite of a number of well-established players such as Beazley Group and Berkshire Hathaway Specialty Insurance to expand their portfolios.
  • Finally, the silver lining in all the clouds generated by an undeniably hard 2020 D&O market has been the opportunity afforded clients to focus on their core coverage priorities. For the vast majority of companies with a good (or even reasonably good) story to tell, D&O insurance will still be attainable at affordable prices in 2021.