Aon | Financial Services Group
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Average Price Per Million, Adjusted for Certain Items, decreased 23.7 Percent in the Second Quarter
Average Change for Primary Policies with Same Limit and Same Deductible decreased 11.0 Percent
Second Quarter Key Metrics and Highlights
- Average price per million decreased 26.8 percent compared to the prior-year quarter.
- Price per million for clients that renewed in both Q2 2023 and Q2 2022 decreased 21.8 percent.
- 83 percent of primary policies renewing with the same limit and deductible experienced a price decrease; 3 percent had a price increase.
- Overall price change for primary policies renewing with same limit and deductible was down 11.0 percent.
- 94.7 percent of primary policies renewed with the same limit.
- 83.4 percent of primary policies renewed with the same deductible.
- 81.5 percent of primary policies renewed with the same limit and deductible.
- 96.0 percent of primary policies renewed with the same carrier.
On July 31st, the Financial Services Group at Aon published the Pricing Index for Public D&O insurance for the three months ended June 30, 2023. The pricing index tracks premium changes relative to the base year of 2001.
The Pricing Index decreased to 1.15 from 1.57 in the prior-year quarter, the fifth quarterly decrease since Q4 2017. The average cost of $1 million in limits decreased 26.8 percent compared to the prior-year quarter.
However, there were several prior-year IPO and DeSPAC (Business Combination) clients that renewed with considerable decreases in Q2 2023 as they move further away from the original transaction. Prior-year IPOs renewing in Q2 2023 decreased, on average, 42.0 percent, while prior-year DeSPAC transactions renewing in Q2 2023 decreased an average of 45.0 percent. Excluding these clients, the Pricing Index decreased 23.7 percent in Q2 2023.
The FSG D&O Pricing Index for Q2 2023 is available here (registration required).
Aon is not a law firm or accounting firm and does not provide legal, financial or tax advice. Any commentary provided is based solely on Aon’s experience as insurance practitioners. We recommend that you consult with your own legal, financial and/or tax advisors on any commentary provided by Aon. The information contained in this document and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity.