towers watson directors and officers liability: 2011 survey of insurance purchasing trends

Directors and Officers Liability Survey 2011 Summary of Results

Directors and Officers Liability Survey: 2011 Summary of Results 1

Introduction 2

2011 Survey Highlights 3

Participant Profile 4

Figure 1: Participation by business class 4

Figure 2: Participation by ownership 4

Figure 3: Participation by size — Total revenues 5

Figure 4: Participation by size — Total assets 5

Figure 5: Participation by size — Market capitalization 5

Figure 6: Number of participants by size 6

Figure 7: International operations by ownership 6

Figure 8: International local policy purchases 6

Figure 9: Purchase of local policies by asset size 7

Figure 10: D&O inquiries 7

Figure 11: Prevalence of independent policy review 7

Policy Limits 8

Figure 12: Total limits by asset size 8

Figure 13: Total limits by asset size — Private organizations only 8

Figure 14: Total limits by asset size — Public organizations only 9

Figure 15: Total limits by market capitalization — Public organizations only 9

Figure 16: Total limits by business class 10

Figure 17: Change in total limits of liability in D&O insurance program 10

Figure 18: Change in limits of liability for primary D&O policy 11

Figure 19: Change in premium paid for primary D&O policy 11

Primary D&O Insurance 12

Figure 20: Primary D&O insurance program structure 12

Figure 21: Primary D&O insurance program structure by ownership 12

Figure 22: Primary limit shared or blended with other coverages 13

Figure 23: Independent director liability 13

Figure 24: Number of endorsements on primary D&O insurance policy 13

Figure 25: Most important aspects of D&O insurance coverage 14

Excess D&O Insurance 15

Figure 26: Excess limits 15

Figure 27: Most important aspects of excess insurer versus primary D&O insurer 15

Side A Only 16

Figure 28: Excess Side A coverage 16

Figure 29: Impetus for purchase of excess Side A policy 16

Figure 30: Excess Side A coverage by asset size — Private organizations only 16

Figure 31: Excess Side A coverage by market capitalization — Public organizations only 17

Figure 32: Amount of excess Side A limits purchased by asset size 17

Figure 33: Amount of excess Side A limits purchased by asset size — Private organizations only 17

Figure 34: Amount of Side A limits purchased by market capitalization — Public organizations only 17

Claims 18

Figure 35: D&O claims during the last 10 years 18

Figure 36: D&O claims in the last 10 years by ownership 18

Figure 37: D&O claims in the last 10 years by asset size 18

Figure 38: Types of claims in the last 10 years 19

Figure 39: Types of claims in the last 10 years by ownership 19

Figure 40: Satisfaction with handling of D&O claim 20

Figure 41: Top D&O liability concerns 20

Appendices 21

Appendix A: D&O Libility Survey — Insurance Market Summary 21

Appendix B: Insurance Placement, Reinsurance Intermediary Services and Insurance Program Reviews 36

Table of Contents

Directors and Officers Liability Survey 2011 Summary of Results

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Welcome to the 2011 Directors and Officers (D&O) Liability Survey, the 33rd in a series of studies conducted by Towers Watson.

The 2011 survey was conducted online from October 18 through November 28, 2011. A total of 401 organizations that purchase D&O liability insurance participated in the survey. Consistent with last year, the respondents in this survey were insurance buyers.

In an effort to provide more meaningful data, we broke several of our responses into two respondent categories, public and private/nonprofit. Where appropriate, and when we felt the information conveyed a material change, we also included comparisons to the 2010 survey.

From traditional securities class action litigation, M&A-related activity, derivative actions, or threats from a wide range of regulatory or law enforcement agencies, directors and officers — and the companies they represent — are under scrutiny from a wide array of potential claimants. Moreover, the costs to defend these lawsuits continue to escalate. It is against this backdrop that we continue to focus our survey on the purchasing patterns surrounding D&O coverage.

Our survey did not capture information about other lines of coverage (e.g., employment practices liability and fiduciary liability).

Similar to previous years, we have also provided a directory of insurers that write D&O coverage.

Sincere thanks once again to those who participated in this year’s survey, as well as to Dan Bailey of Bailey Cavalieri, and Kevin LaCroix of OakBridge Insurance Services for their continued contributions to this survey.

It is because of your support and participation that we are able to offer this unique report on D&O liability insurance. We hope you enjoy reading our report as much as we have enjoyed putting it together.

Lawrence A. Racioppo Executive Liability, Towers Watson [email protected]

Introduction


• 25% of public companies and 14% of private/nonprofit respondents indicated that they increased the total limits of liability in their D&O program at renewal.

• Regulatory claims once again topped the list of top three D&O liability concerns, with an 81% response rate, edging out 2010’s 78% response.

• The number of directors and officers who inquired about the amount and scope of coverage increased significantly in 2011. Over two-thirds (69%) made an inquiry in 2011, compared with 57% in 2010.

• 18% of private organizations reported an increase in their primary D&O policy premium, though the increase is partly attributable to the fact that 11% reported a limit increase.

• The scope of coverage for directors was considered the most important aspect of an organization’s D&O program, yet very few firms actually purchased insurance dedicated to independent/outside directors.

• Twice as many respondents (20%) consider pricing the most important factor when selecting an excess insurer, compared with 10% of respondents that consider pricing the most important factor when choosing a primary insurer.

• Nearly 20% of respondents that reported having a D&O claim were dissatisfied with the insurers’ handling of their claims.

• Less than half (47%) of respondents conducted an independent review of their D&O policies in the past two years.

• All dollar amounts reported are in U.S. dollars.

2011 Survey Highlights

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� 56% Public

� 22% Private

� 16% Charities and nonpro�ts

� 6% Other22%

00%00%

16%

56%

Figure 2. Participation by ownership

6%

0% 5% 10% 15% 20%

Other

Transportation

Retail and Wholesale

Property and Construction

Professional and Business Services

Natural Resources

Manufacturing

High Technology

Health Care — Pharmaceuticals

Health Care, excluding Pharmaceuticals

Government and Education

Food Beverage

Financial Services — Insurance

Financial Services, excluding Insurance

Energy and Utilities

Communications

Charities and Nonpro�ts

Automobiles and Transport Equipment

Aerospace and Defense22

Figure 1. Participation by business class

33

11

44

1111

88

1818

33

66

88

11

33

1414

44

33

11

55

33

22

The 401 respondents in our 2011 survey represent all major industries and service sectors. The top three business classes represent 43% of all participants. The financial services — insurance sector had the largest showing, with an 18% participation rate, followed closely behind by manufacturing, with a 14% showing. Rounding out the top three were respondents in the energy and utilities business sector (11%). The next tier of respondents had an 8% share, with a 3% rate shared by five sectors (Figure 1).

Public companies garnered the largest share of respondents (56%) when broken out by ownership, compared with 22% for private companies, and 16% for charities and nonprofits (Figure 2).

Participant Profile


0% 10% 20% 30% 40%

Less than $250 million

$250 million to $499 million


$1 billion to $4.9 billion


$10 billion or more

Figure 3. Participation by size Total revenues

Average: $4,254 millionn=325 (excluding charities and nonpro�ts)

1919

1616

3434

99

88

1414

0% 10% 20% 30% 40%






$10 billion or more

Figure 4. Participation by size Total assets

Average: $5,070 millionn=314 (excluding charities and nonpro�ts)

3030

1313

3333

88

66

1010

0% 10% 20% 30% 40%






$10 billion or more

Figure 5. Participation by size Market capitalization*

Average: $5,311 millionn=197

*Public organizations only

3030

1414

3737

99

55

55

Excluding charities and nonprofits, the largest group of respondents — representing roughly a third of all participants, whether measured by total revenues, total assets or market capitalization — was once again in the $1 billion – $4.9 billion range (Figures 3, 4 and 5).

This group of companies had an average size of $4.25 billion in revenues, with 19% posting revenue of $10 billion or more and 14% reporting total revenue of less than $250 million (Figure 3).

When measured by total assets, respondents averaged $5.07 billion, with a full 30% claiming $10 billion or more and 10% reporting less than $250 million (Figure 4).

Total market capitalization averaged $5.3 billion, with 30% reporting $10 billion or more and a smaller 5% reporting less than $250 million (Figure 5).

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Figure 7. International operations by ownership

Yes No

Nonprofit 17% 83%

Private 38% 62%

Public 68% 32%

All groups, excluding charities and nonprofits 56% 44%

All groups (total respondents) 49% 51%

0 50 100 150

$10 billion or more

$5billion to $9.9 billion





� Assets � Revenue

*Excluding charities and nonpro�ts

Figure 6. Number of participants by size*

30304646

20202626

25252929

104104110110

40405151

63639595

Yes, and purchase local policies

Yes, but do not purchase local policies

No international operations

Figure 8. International local policy purchasesDoes your organization have international operations? Do you purchase local policies in foreign jurisdictions?

Private

21%

17%

62%

Public

29%

39%

32%

In reviewing the number of participants, the $1 billion — $4.9 billion group was by far the largest, with a total of 104 when measured by total assets and 110 from a revenue standpoint. This group was followed by respondents with $10 billion or more, represented by 95 participants when measured by assets and 63 by revenue. The smallest grouping was in the $250 million — $499 million range, with 20 participants in this asset range and 26 within this revenue bandwidth (Figure 6).

Excluding charities and nonprofits, 56% of participants indicated they have international operations. Over two-thirds (68%) of our public company respondents reported having international operations. Charities and nonprofits, conversely, were far less likely to have international units, with 83% without an international presence. When all participants including charities and nonprofits are considered, there is a reverse shift, with just over half (51%) responding that they do not have international operations (Figure 7).

Public companies indicated they are much more likely to purchase a local policy in a foreign jurisdiction. Of the 68% of public companies with international operations, 39% responded that they purchase local policies. Only 17% of private companies that have international units purchase such local policies (Figure 8).


Figure 9. Purchase of local policies by asset size

Yes No

Less than $250 million 0% 100%

$250 million to $999 million 35% 65%

$1 billion to $4.9 billion 55% 45%

$5 billion to $9.9 billion 59% 41%

$10 billion or more 63% 37%

All size groups, excluding charities and nonprofits 54% 46%

All groups (total respondents) 53% 47%

Yes

No

Figure 10. D&O inquiriesDuring the past 12 months, has a director or of�cer of your company inquired as to the amount and scope of coverage?

2011

69%

31%

2010

57%

43%

21% Yes, through a law �rm

17% Yes, through another broker

8% Yes, through a consultant

1% Yes, through another third party

53% No

Figure 11. Prevalence of independent policy review In the past two years, have you conducted an independentreview of your D&O liability policy?

17%

53%

8%

1%

21%

Once again, the larger the company, the more likely it was to purchase local policies. Fifty-three percent of all respondents purchased local policies driven by companies with an asset size of $10 billion or more (63%), and $5 billion to $9.9 billion (59%) (Figure 9). These results continue to demonstrate the strides organizations have made in understanding the complexities and exposures when conducting business outside of the United States. Moreover, they also signify the importance of all insurers being able to offer a product to address such exposures.

Interestingly, more respondents reported receiving an inquiry about their level of D&O coverage. During the past 12 months, 69% of respondents’ directors or officers asked about the amount and scope of

coverage. This represents a 12% increase over 2010 (57%), and in our view is a reflection of the level of concern directors and officers have in ensuring their personal assets are protected (Figure 10).

In spite of a heightened interest in coverage, the majority of companies participating in the survey (53%) have not conducted an independent review of their policies in the past two years. Of those participants that conducted a review, 45% completed the process through a law firm and 36% through a broker (Figure 11).

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“Survey respondents represented a broad range of public, private and nonprofit organizations.”

Figure 12. Total limits by asset size

Participants reporting

First quartile Median

Third quartile Average

Less than $250 million 30 $ 5.0 $ 10.0 $ 15.0 $ 11.9$250 million to $999 million 45 10.0 25.0 50.0 32.8$1 billion to $4.9 billion 104 28.2 55.0 100.0 64.8$5 billion to $9.9 billion 40 75.0 120.0 150.0 115.1$10 billion or more 95 100.0 175.0 255.0 187.5All size groups, excluding charities and nonprofits 333 250.0 65.0 150.0 98.0All groups (total respondents) 399 $ 20.0 $ 50.0 $125.0 $ 86.9

Figure 13. Total limits by asset sizePrivate organizations only




Less than $250 million 18 $ 2.8 $ 5.5 $ 11.3 $ 8.3$250 million to $999 million 22 10.0 10.0 20.0 16.2$1 billion to $4.9 billion 27 20.0 30.0 50.0 35.9$5 billion to $9.9 billion 3 55.0 60.0 75.0 63.3$10 billion or more 10 40.0 102.5 163.8 135.0All size groups (private organizations only) 88 $10.0 $ 20.0 $ 45.0 $ 36.3

Survey respondents represented a broad range of public, private and nonprofit organizations. The average in total policy limits for respondents, excluding charities and nonprofits, was $98 million. When all participants were considered, the average limit dropped to $86.9 million. Companies with $10 billion or more in assets reported average limits of $187.5 million, and those with assets of between $5 billion and $9.9 billion reported an average of $115.1 million in total limits (Figure 12).

When focusing solely on our private company respondents, the average dropped substantially, to $36.3 million. Again, the average was bolstered considerably by larger private company respondents. Those with $10 billion or more averaged $135 million in total policy limits, and those in the $5 billion – $9.9 billion category reported $63.3 million (Figure 13).

Policy Limits


Figure 14. Total limits by asset sizePublic organizations only




Less than $250 million 10 $ 8.8 $ 12.5 $ 22.5 $ 16.7$250 million to $999 million 20 41.3 50.0 70.0 55.0$1 billion to $4.9 billion 69 45.0 75.0 110.0 80.6$5 billion to $9.9 billion 35 100.0 125.0 150.0 123.7$10 billion or more 79 110.0 200.0 300.0 203.0All size groups (public organizations only)

222 $ 50.0 $100.0 $175.0 $126.8

Figure 15. Total limits by market capitalizationPublic organizations only




Less than $250 million 10 $ 8.8 $ 15.0 $ 35.0 $ 25.7

$250 million to $499 million 9 27.5 40.0 65.0 47.8$500 million to $999 million 17 45.0 60.0 72.5 65.5$1 billion to $4.9 billion 73 60.0 100.0 122.5 96.3$5 billion to $9.9 billion 28 101.3 127.5 190.0 137.5$10 billion or more 60 160.0 200.0 300.0 227.4All size groups (public organizations only)

222 $ 50.0 $100.0 $175.0 $126.8

When turning our attention to public company respondents, the average total policy limit was $126.8 million, roughly four times the average for private companies. The average for companies with $10 billion or more in asset size was $203 million, and $123.7 million for those in the $5 billion –

$9.9 billion asset range (Figure 14). Again, the top two respondent ranges, $5 billion – $9.9 billion, and $10 billion and more, had the highest total limits, with respective averages of $137.5 million and $227.4 million (Figure 15).

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Figure 16. Total limits by business class




Aerospace and Defense 8 $10.0 $ 50.0 $220.0 $101.3Automobiles and Transport Equipment 4 77.5 140.0 412.5 210.0Charities and Nonprofits 13 7.5 10.0 40.0 22.6Communications 15 72.3 150.0 200.0 145.5Energy and Utilities 46 93.8 140.0 200.0 148.4Financial Services, excluding Insurance 32 20.0 29.0 90.0 80.8Financial Services — Insurance 70 10.0 25.0 71.3 62.6Food and Beverage 10 48.8 92.5 131.3 93.0Government and Education 23 5.0 15.0 30.0 24.3Health Care, excluding Pharmaceuticals 32 11.3 30.0 75.0 46.5Health Care — Pharmaceuticals 6 43.8 97.5 212.5 118.3High Technology 12 68.8 137.5 225.0 159.6Manufacturing 56 41.3 75.0 136.3 87.7Natural Resources 15 20.0 60.0 120.0 105.0Professional and Business Services 10 10.0 17.5 42.5 31.5Retail and Wholesale 20 30.0 60.0 123.8 87.8Transportation 13 35.0 70.0 117.5 93.8Other 14 18.8 67.5 125.0 97.0All business classes (total respondents) 399 $20.0 $ 50.0 $125.0 $ 86.9

Figure 17. Change in total limits of liability in D&O insurance programCompared to your previous D&O insurance program, have the total limits of liability in your D&O insurance program increased, decreased or stayed the same?

Private/Nonpro�t

82%

14%

Public

69%

25%

5%

3% 1% 1%

Increased

Stayed the same

Decreased

Not sure

Once again, a significant portion of all public and private companies participating in the survey reported increasing the total limits of liability in their D&O program. A quarter of public companies indicated that they increased their D&O insurance coverage, while 14% of private/nonprofit organizations indicated that the limits in their D&O

insurance program increased in 2011 over 2010 (Figure 17). Last year we reported as a “combined” figure, which showed 21% had increased their D&O limits. The wide range of exposures facing directors and officers continues to play a major role in the purchasing decision.


Figure 18. Change in limits for primary D&O policyCompared to your previous primary D&O policy, has your D&O limit increased, decreased or stayed the same?

Private/Nonpro�t

88%

11%

Public

83%

13%

1% 1%

Increased

Stayed the same

Decreased

Not sure

3%

Figure 19. Change in premium paid for primary D&O policyCompared to your previous D&O policy, did the premium paid for your primary insurance policy increase, decrease or stay the same?

Private/Nonpro�t

46%

18%

Public

62%

14%

1% 1%

Increased

Stayed the same

Decreased

Not sure

35%

23%

Public companies were slightly more likely to change their primary D&O policy limits. For instance, 13% of public companies increased coverage, compared with 11% for private/nonprofits. A decrease was posted by 3% of public companies and 1% of private/nonprofits (Figure 18).

The majority of both public and private respondents reported a change in premium paid for their primary D&O policy, though more were able to achieve a pricing decline — 62% for public and 35% for

private/nonprofit. However, more private/nonprofits experienced a slightly greater increase in premiums (18%) compared with public companies (14%). The 18% figure is particularly noteworthy when viewed in conjunction with Figure 18. Only 11% (of the 18%) can be attributable to a primary limit increase, which is interesting, as it signals a potential hardening in the private/nonprofit segment with insurers looking to drive rates (Figure 19).

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6% Side A only

20% Side A/B only

60% Side A/B/C

1% Other

13% Not sure

Figure 20. Primary D&O insurance program structureHow is your primary D&O insurance program structured?

20%

13%

60%

1% 6%

Consistent with last year, the majority of participants in the 2011 survey (60%) reported a primary program structure inclusive of traditional Side A/B/C coverage. Twenty percent of organizations conveyed a Side A/B structure. Once again, only 6% of respondents reported maintaining a Side A-only structure (Figure 20).

Nonprofit (32%) and private (19%) organizations were also far more likely to respond that they were not sure how their primary D&O program was structured, compared with their public company counterparts (5%). While this represents a slight improvement over the 2010 figures, insurance brokers and management liability consultants need to continue educating the private and nonprofit buyer about their D&O coverage (Figure 21).

Primary D&O Insurance

Figure 21. Primary D&O insurance program structure by ownership

Participants reporting Side A/B/C

Side A/B only

Side A only Other Not sure

Nonprofit 66 44% 17% 6% 1% 32%

Private 88 49% 26% 5% 1% 19%

Public 223 70% 18% 7% 0% 5%

All groups (total respondents) 401 60% 20% 6% 1% 13%


Figure 22. Primary limit shared or blended with other coveragesIs your primary D&O limit shared or blended with other coverages (e.g., EPL, �duciary)?

Private/Nonpro�t

44%

Public

84%

14%

1% 2%

Yes

No

Not sure

55%

Private companies and nonprofits are more likely to share or blend ancillary exposures than public companies. A notable 44% of private companies and nonprofits share or blend their D&O program with other coverages, such as employment practices liability (EPL) or fiduciary liability policies. Far fewer public companies (14%) reported using such a strategy (Figure 22).

While the vast majority of survey participants do not purchase D&O liability insurance that covers only independent/outside directors, public companies are more likely to buy such coverage, or to at least consider the option. Seven percent of public companies purchased insurance for independent directors, compared with 1% of private/nonprofits. Another 10% are considering this additional coverage (Figure 23).

Brokers and risk professionals continually work towards creating comprehensive D&O programs that provide best in class coverage. As such, it is not uncommon to have multiple enhancement endorsements added to a policy. Careful consideration should be given when drafting such language. At times, multiple “enhancement endorsements” may be added to a policy that modifies the same policy provision(s). Conflicting language within the endorsements may present issues in the event of a claim. This phenomenon prompted Towers Watson to ask respondents about the number of endorsements on their primary D&O policy. Generally speaking, it is certainly reasonable for a primary D&O policy for a public company to contain more endorsements than that of a private/nonprofit organization. Regardless of the number of endorsements on a given policy, all policies and endorsements should be carefully reviewed to avoid any conflicting language that could add needless complexity when faced with a claim (Figure 24).

Figure 23. Independent directorship liability (IDL)Does your organization purchase D&O liability insurance that covers only independent/outside (excluding inside) directors?

Private/Nonpro�t Public

83%

7%

1% 1%

Yes

No but considering

No and not considering

98%

10%

Figure 24. Number of endorsements on primary D&O insurance policyHow many endorsements are on your primary D&O insurance policy?

Private/Nonpro�t Public

33%

14%

2% Less than 10

Between 10 and 20

Between 21 and 30

Between 31 and 40

More than 40

Not sure

25%

29%38%

19%

10%

6%

13%

7%

4%

“Private companies and nonprofits are more likely to share or blend ancillary expo-sures than public companies.”

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55 4949

4545

66 2525 4747

99 2323 5050

77 88 2727 3939

0% 20% 40% 60% 80% 100%

Competitive pricing

Scope of coverage for the company

Scope of coverage for of�cers

Scope of coverage for directors

1616

3636

3939 7878

4545

2525

2323

Ranked �rst Ranked second Ranked third

Figure 25. Most important aspects of D&O insurance coverageRanking for aspects of D&O insurance coverage on a scale of 1 to 4, where 1 is most important and 4 is least important (top three rankings)

5050 3232

66 5050

1212 9494

9292

2929 1010

1515 77 18181414 3636

Private/Nonpro�t

0% 20% 40% 60% 80% 100%

Competitive pricing

Scope of coverage for the company

Scope of coverage for of�cers

Scope of coverage for directors

1616 9595

4848 6868

4545

7575 1717

77 7272

66 9898

1212 88

55 44 18183030 3939

Public

When asked about the most important aspects of D&O coverage, respondents from public and private/nonprofit companies were in agreement — with the scope of coverage for directors leading the way with 75% and 50%, suggesting this was the most important aspect of their companies’ D&O coverage. These figures far outweighed those that reported protecting the needs of corporate officers (7% and 6%, respectively) or protecting the organization (12% and 29%, respectively) as most important (Figure 25).

What is most interesting about the figures above is that although the vast majority of respondents

suggested that the scope of coverage available to directors was their primary focus, very few actually purchased insurance dedicated to independent/outside directors, as reported in Figure 23. As a practical matter, the D&O purchasing decision is oftentimes made within the risk management or similar function inside an organization. As a result, all constituents (directors, officers and the organization itself) are often considered when constructing a D&O program (Figure 25).


Over three-quarters of respondents (77%) indicated that, in addition to primary D&O coverage, excess limits are purchased through at least one additional insurer (Figure 26).

The most important aspects of D&O insurers were ranked in the same order by both primary and excess purchasers, with financial strength, breadth of coverage offered and pricing rounding out the top three. However, the degree of importance for each differed somewhat. For instance, while an insurer’s financial strength ranked as the most important component for both primary and excess insurers, breadth of coverage offered by a primary insurer ranked as most important for 34% of respondents, with pricing the most important factor only 10% of the time. However, when considering their excess insurer, the importance of pricing doubled, with 20% of respondents reporting that price was of greatest importance. The fact that organizations are more inclined to select an excess insurer on pricing foremost is noteworthy. Selecting excess insurers based on pricing can be dangerous. In fact, we have seen many examples over the past few years whereby poorly constructed excess programs have made excess D&O coverage inaccessible to companies. Pricing, while important, should be considered only after a careful review of the breadth of coverage offered (Figure 27).

Excess D&O Insurance

77% Yes

23% No

Figure 26. Excess limitsIn addition to your primary D&O limit, are excess limits purchased through at least one additional insurer?

23%

77%

0% 20% 40% 60% 80% 100%

Volume of D&O premium written

Knowledge/understanding of your business

Claims paying reputation

Competitive pricing

Breadth of coverage offered

Financial strength

1818

2626


Figure 27. Most important aspects of excess insurer versus primary D&O insurerRank the following aspects of your excess insurer on a scale of 1 to 6, where 1 is most important and 6 is least important (top three rankings).

3636 1919 7777

8282

6969

6767

5353

2323

66

7777

5454

5252

3434

66

3434 2525

2222

1010 1818

1111 1818 2222

1313

Primary D&O insurer

0% 20% 40% 60% 80% 100%

Volume of D&O premium written

Knowledge/understanding of your business

Claims paying reputation

Competitive pricing

Breadth of coverage offered

Financial strength

16162525

17173939

2525 2020

2626

2020

1212 1818

2424

Excess insurer

121299

2244

2222

2323

33 99 1111

441111

Excess insurer base: Those purchasing an excess policyn=309

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Fifty-seven percent of respondents purchased an excess Side A or Side A difference-in-conditions (DIC) policy (Figure 28). When asked what was the main impetus driving the purchase decision, 71% cited breadth of coverage, a significant increase over the 45% response in 2010. Such a meaningful increase demonstrates that organizations understand the myriad benefits a comprehensive Side A program offers. Protection against bankruptcy, both for the underlying insurer and for the respondent’s organization, also experienced a sizable increase in responses, with 15% and 12% increases, respectively (Figure 29).

As you might expect, the larger the organization, the more likely it is to purchase Side A coverage. For private organizations specifically, the majority of firms with total assets in excess of $1 billion purchased excess Side A coverage. Conversely, over three-quarters of smaller firms with under $250 million in assets reported not doing so (Figure 30).

From a market capitalization standpoint, over three-quarters of public company respondents (78%) purchased excess Side A coverage, and purchase of this coverage was well represented irrespective of size (Figure 31).

For all respondents, the average amount of excess Side A limits purchased was $46.1 million. The largest average of $92.5 million was represented by companies with $10 billion or more in assets (Figure 32). The average limit for all private organizations was more modest at $19.8 million (Figure 33). When measured by market capitalization, the average for 174 public companies was $54.6 million, with larger companies (in the $10 billion-plus range) posting an average of $114.6 million in excess Side A limits purchased (Figure 34).

57% Yes

33% No

10% Not sure

Figure 28. Excess Side A coverageDid your organization purchase an excess Side A or Side A DIC policy?

57%

10%

33%

2011 2010

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Premium savings

Board member required it

Protection against bankruptcy of your organization

Protection against bankruptcy of underlying insurer

Concern about large loss

Breadth of coverage

Figure 29. Impetus for purchase of excess Side A policyWhat was the main impetus for the purchase of the excess Side A policy?

7145

4745

4227

4028

2429

109

68

18

158

15

15

10

13

105

108

Figure 30. Excess Side A coverage by asset sizePrivate organizations only

Participants reporting Yes No Not sure

Less than $250 million 18 5% 78% 17%

$250 million to $999 million 22 27% 50% 23%$1 billion to $4.9 billion 27 52% 48% 0%$5 billion to $9.9 billion 3 67% 33% 0%$10 billion or more 10 60% 30% 10%All size groups (private organizations only)

88 34% 55% 11%

Side A Only


Figure 31. Excess Side A coverage by market capitalizationPublic organizations only

Participants reporting Yes No Not sure

Less than $250 million 10 50% 30% 20%$250 million to $499 million 9 78% 11% 11%$500 million to $999 million 17 82% 18% 0%$1 billion to $4.9 billion 73 82% 17% 1%$5 billion to $9.9 billion 28 93% 7% 0%$10 billion or more 60 78% 20% 2%All size groups (public organizations only) 223 78% 18% 4%

Figure 32. Amount of excess Side A limits purchased by asset size




Less than $250 million 6 $ 8.8 $10.0 $ 16.3 $11.7$250 million to $999 million 24 10.0 12.5 23.8 16.5$1 billion to $4.9 billion 70 10.0 15.0 25.0 22.4$5 billion to $9.9 billion 31 25.0 30.0 50.0 37.1$10 billion or more 74 30.0 70.0 101.3 92.5All size groups, excluding charities and nonprofits

215 10.0 25.0 50.0 48.2

All groups (total respondents) 231 $10.0 $25.0 $ 50.0 $46.1

Figure 33. Amount of excess Side A limits purchased by asset sizePrivate organizations only




Less than $250 million 1 $20.0 $20.0 $20.0 $20.0

$250 million to $999 million 6 4.5 7.5 11.3 8.0$1 billion to $4.9 billion 14 5.0 10.0 20.0 12.5$5 billion to $9.9 billion 2 10.0 30.0 50.0 30.0$10 billion or more 6 22.5 37.5 62.5 44.2All size groups (private organizations only)

30 $ 5.0 $15.0 $25.0 $19.8

Figure 34. Amount of Side A limits purchased by market capitalizationPublic organizations only




Less than $250 million 5 $ 7.5 $10.0 $ 20.0 $ 13.0$250 million to $499 million 7 10.0 15.0 20.0 16.4$500 million to $999 million 14 10.0 20.0 30.0 21.4$1 billion to $4.9 billion 60 10.0 25.0 38.8 29.6$5 billion to $9.9 billion 26 23.8 35.0 70.0 53.8$10 billion or more 47 50.0 75.0 133.1 114.6All size groups (public organizations only)

174 $15.0 $30.0 $ 65.0 $ 54.6

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34% Yes

66% No

Figure 35. D&O claims in the last 10 yearsHas your organization had any claims against its D&O liability policy during the last 10 years?

34%

66%

0% 10% 20% 30% 40% 50%

All groups (total respondents)

Public

Private

Nonpro�t

Figure 36. D&O claims in the last 10 years by ownership

4848

1717

3636

3434

55

55

Nearly two-thirds of survey participants indicated they have not had any claims against their D&O liability policy in the last 10 years (Figure 35). Nonprofits were most likely to report claims in the last 10 years (48%), followed by public companies (36%) and private companies (17%) (Figure 36).

As you might expect, larger companies were more susceptible to claim activity. Nearly half (48%) of participants with $10 billion or more in assets faced claims over the last decade, followed by the $5 billion – $9.9 billion range, with 43% reporting claims (Figure 37).

Claims

0% 10% 20% 30% 40% 50%

$10 billion or more





Figure 37. D&O claims in the last 10 years by asset size

1717

2121

1919

4343

4848

55


Figure 39. Types of claims in the last 10 years by ownershipThose organizations having claims during the past 10 years

Direct shareholder/ investor suit

Derivative shareholder/ investor suit Employment-related Regulatory Fiduciary Other

Nonprofit 0% 3% 73% 23% 13% 27%

Private 21% 7% 36% 14% 14% 29%

Public 69% 65% 15% 18% 17% 6%

All groups (total respondents) 45% 42% 32% 19% 15% 15%

0% 10% 20% 30% 40% 50%

Other

Fiduciary

Regulatory

Employment

Derivative shareholder

Direct shareholder

� 2011 � 2010

Figure 38. Types of claims in the last 10 yearsThose organizations having claims during the past 10 years

45454646

42424040

32323030

19191616

15152121

15151515

The lion’s share of claims continues to come from shareholders (both direct, with 45% of respondents reporting these, and derivative, with 42% of respondents reporting these) (Figure 38).Employment-related matters continued to be the primary source of claims for private and nonprofit organizations, with EPL-related claims reported by 36% and 73% of these respondents, respectively (Figure 39).

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The survey also found that nearly two-thirds (65%) of respondents to the 2011 survey were satisfied with their insurers’ handling of their D&O claims, an increase from 56% last year. However, nearly 20% of respondents reporting having a D&O claim were once again dissatisfied with how insurers handled their claim. Such a large percentage is disappointing and suggests that claim handling is an area that should be top of mind for insurers interested in improving their level of service (Figure 40).

Direct shareholder/investor suits once again represented the greatest source of concern for respondents, with 36% citing it as their greatest concern. However, regulatory claims once again topped the list with an 81% response rate (combined first, second and third rankings), a slight increase over the 78% reported in 2010 (Figure 41).

Satis�ed

Neutral

Dissatis�ed

Figure 40. Satisfaction with handling of D&O claimHow satis�ed were you with your D&O insurer’s handling of the claim?Those organizations having claims during the past 10 years

2011

16%65%

19%

2010

24%

56%

20%

0% 20% 40% 60% 80% 100%

Employment-related

Fiduciary

Derivative shareholder/investor suit

Direct shareholder/investor suit

Regulatory

3333

1111

2424

19193636

Figure 41. Top D&O liability concernsRanking for the following types of claims on a scale of 1 to 5, where 1 is the greatest concern to the organization and 5 is the least concern (top three rankings)

2121 2424

1919 2626

3636 8181

7878

6868

6868

5858

5353

4949

5050

4444

5151

4141 1616

1414

1313

19192525

1919

1616 2323

1919 1919

1616 99

1515 1818

10

10

12

19

18

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010



Liability Survey Insurance Market Summary

Company Contact Capacity (in millions) Comments

ABA Insurance Services, Inc.

Gina Juhnke, Product Manager ABA Insurance Services, Inc. 5910 Landerbrook, Suite 100 Mayfield Heights, OH 44124 800-274-5222 e-mail: [email protected]

2011 $15 Writes commercial banks and thrifts.

ACE

ACE Bermuda Jeffrey Jabon Senior Vice President Head of Professional Lines ACE Bermuda Insurance Ltd. 17 Woodbourne Avenue P.O. Box HM 1015 Hamilton HM 08 Bermuda 441-295-5200 e-mail: [email protected] web: www.acegroup.com or www.acebermuda.com

2011 $50 All segments and classes of business, including public, private, partnerships, sporting organizations, not-for-profit and financial institutions. Excess follow-form all lines (for Side A, see CODA). Manuscript (bespoke) policies available for complex risk solutions. $50 million minimum attachment. Bermuda representative and international brokers.

ACE International Ben Ingram, Senior Vice President Nicholas Small International FI Underwriting Manager ACE International ACE Building 100 Leadenhall Street London EC3A 3BP 011-44-20-7173-7972 011-44-20-7173-7973 e-mail: [email protected] [email protected] web: www.aceltd.com

2011 $25 ACE International writes international accounts, excluding U.S.-headquartered corporations, with a capacity of $25 million primary or excess. ACE will consider all classes of accounts, including financial institutions. Local underwriters and local language policy forms in most international countries.

ACE USA Tim O’Donnell, President ACE Professional Risk 140 Broadway New York, NY 10005 646-458-7004 646-458-6880 (fax) e-mail: timothy.o’[email protected] web: www.aceprofessionalrisk.com

2011 $25 All segments and classes of business, including public, private, not-for-profit and financial institutions. Retail brokers. Writes on Illinois Union paper.

Appendix A

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CODA

(Corporate Officers & Directors Assurance)

Jeffrey Jabon Deputy Chairman Chief Underwriting Oficer Senior Vice President ACE Bermuda Insurance Ltd. 17 Woodbourne Avenue P.O. Box HM 1015 Hamilton HM 08 Bermuda 441-278-6615 e-mail: [email protected] web: www.acegroup.com or www.acebermuda.com

2011 $75 All segments and classes of business, including public, private, partnerships, sporting organizations, not-for-profit and financial institutions. Side A/DIC (Difference-in-Conditions, “drop-down” cover), Premier Personal Asset Protection for Directors & Officers (no Corporate Reimbursement) as well as Corporate Governance exposure coverage for Independent Directors, Executive Officers Only coverage, and Retiring(ed) Director & Officer coverage; all for non-indemnified risks, global or otherwise. Manuscript (bespoke) policies available for complex risk solutions. No minimum attachment, primary Side A can be stand-alone or unique policy architecture can be structured to sit parallel to B/C cover and applicable retention-allowing CODA’s broad Side A coverage to be expanded upward throughout follow-form tower. Bermuda representative and international brokers.

Westchester Specialty Joseph Casey President Professional Risk ACE Westchester Specialty 500 Colonial Center Parkway, #200 Roswell, GA 30076 678-795-4258 678-795-4150 (fax) e-mail: [email protected] web: www.acewestchester.com

2011

Side A

$15

$25

All classes. Wholesale brokers.

AEGIS Karen P. Larson, Vice President AEGIS Insurance Services, Inc. 1 Meadowlands Plaza E. Rutherford, NJ 07073 201-508-2804 e-mail: [email protected] web: www.aegislimited.com

2011

$35

Utilities, energy, related energy and public power.

Alterra

Alterra Insurance Ltd. James C. Gray, EVP & CUO Alterra Insurance Ltd. Alterra House 2 Front Street Hamilton HM 11 Bermuda 441-296-8800 441-296-8811 (fax) e-mail: [email protected] web: www.maxbermuda.com

2011

Side A

$15

$25

Excess AB, ABC, Side A and Side A DIC. No excluded classes.



Alterra USA Daniel G. Gamble, Managing Director Alterra USA 55 Broadway, Suite 2101 New York, NY 10006 212-898-6622 646-300-4104 (mobile) e-mail: [email protected]

2011

Side A

$15

$25

All classes.

American Safety Insurance Services, Inc.

Peter McKeegan, Vice President Professional Liability Group 101 Hudson Street, Suite 3606 Jersey City, NJ 07302 201-830-2264 201-830-2279 (fax) e-mail: [email protected] web: www.amsafety.com

2011 $5 (D&O and E&O)

Primary or Excess: D&O/EPL/Fiduciary — Public, Private, Partnerships or Nonprofit for virtually all classes other than Financial Institutions. Both standard and/or difficult-to-place risks considered.

Miscellaneous Professional, Insurance Agents and Select Lawyers, Technology E&O and A&E are also available on both a Primary and Excess basis. Contact [email protected] for E&O products.

Arch Insurance

Arch Insurance (U.S.) John A. Rafferty One Liberty Plaza, 53rd Floor New York, NY 10006 (646) 563-6364 e-mail: [email protected]

2011 $25 All classes.

Arch Insurance Bermuda Matt Smith, Vice President Underwriting Manager Executive Assurance Arch Insurance Bermuda 11 Victoria Street, 4th Floor Victoria Hall P. O. Box HM 129 Hamilton HM 11 Bermuda 441-278-9268 441-278-9276 (fax) e-mail: [email protected] web: www.archinsurance.bm


Aspen Insurance Group Fred Cooper Aspen Specialty 101 Hudson Street, 36th Floor Jersey City, NJ 07302 (646) 502-1022 (646) 502-1020 (fax) e-mail: [email protected] web: www.aspenspecialty.com

2011 $25 • Commercial and Financial Institutions • Primary and Excess• D&O• Side A• Employment Practices• Fiduciary Liability• Private Equity• Private Company Coverage


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AWAC

AWAC US (Allied World Assurance Company)

Thomas Kennedy Allied World Assurance Company 199 Water Street, 24th Floor New York, NY 10038 646-794-0514 646-794-0611 (fax) e-mail: [email protected] web: www.awac.com


AWAC Bermuda (Allied World Assurance Company)

Ed Moresco, Senior Vice President Bermuda & International Professional Liability Manager Allied World Assurance Company 27 Richmond Road P.O. Box HM 3010 Hamilton HM MX Bermuda 441-278-5401 e-mail: [email protected] web: www.awac.com


Axis Capital

AXIS Insurance John A. Kuhn Chief Executive Officer AXIS Insurance & Global Practice Leader Professional Lines AXIS Insurance 300 Connell Drive, Suite 8000 P.O. Box 357 Berkeley Heights, NJ 07922-0357 908-508-4302 908-508-4301 (fax) e-mail: [email protected] web: www.axiscapital.com

2011 $25 D&O Insurance and other professional lines coverages for publicly traded and privately held companies of all sizes. Commercial accounts, financial institutions and not-for-profit organizations. U.S. underwriting companies include AXIS Insurance Company, AXIS Reinsurance Company, and AXIS Surplus Insurance Company. In the U.S., contact John Van Decker, head of North American Professional Lines, [email protected] or 908-508-4367. Outside the U.S., contact Graham Evans, head of International Professional Lines, [email protected] or +44 (0)207 877 3880. Key business unit contacts: [email protected] for AXIS Financial Insurance Solutions (U.S.); [email protected] for AXIS Financial Institutions (U.S.); [email protected] in Bermuda; and [email protected] in London.




Professional Risk Facilities, Inc.

Stephen Cavallaro, Underwriting Manager Professional Risk Facilities, Inc. 1122 Franklin Avenue, 2nd Floor P.O. Box 9240 Garden City, NY 11530 516-408-5736 516-747-6074 (fax) e-mail: [email protected] web: www.professionalrisk.net

2011 $5 All classes except financial institutions and public companies. Underwriting manager/program administrator for C.N.A., utilizing C.N.A.’s Epack and Epak Extra policy forms (D&O, EPL, Fiduciary, MPL, Crime and Technology & Privacy Liability), which is admitted in all 50 states and written on Columbia Casualty Company paper. Coverage is also available for not-for-profit organizations.

Beazley Group plc Tony Komro Michael J. Schmitt Specialty Lines Beazley Group 35 East Wacker Drive, Suite 3900 Chicago, IL 60601 312-506-1304 Tony’s office 312-506-1305 Michael’s office e-mail: [email protected] [email protected] web: www.beazley.com

2011 $20 Primary or excess for commercial risks. Issuing company: Beazley Insurance Company, Inc. (option for non-admitted paper Syndicate 2623/623 at Lloyd’s)

Catlin US Catherine Cossu Catlin, Inc. Financial Square 32 Old Slip, 36th Floor New York, NY 10005 212-801-3400 e-mail: [email protected] David McDonald James Thomas Catlin, Inc. 60 State Street, Suite 1250 Boston, MA 02109 617-316-1207 e-mail: [email protected] [email protected] Stephen McGill Michael Scarlata Catlin, Inc. 5700 Canoga Avenue, Suite 130 Woodland Hills, CA 91367 818-577-4100 e-mail: [email protected] [email protected]

2011 $15 All classes — both primary and excess.

Catlin Insurance Company Inc. and Catlin Specialty Insurance Company

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Chartis

Financial Lines, a division of Chartis

Robert Yellen, Chief Underwriting Officer 175 Water Street New York, NY 10038 212-458-3745 e-mail: [email protected] web: www.chartisinsurance.com


Domestic: Peter McKenna Head of Management Liability 212-458-1410

Brady Head Head of Public Company Management Liability 713-342-7513

Shelley Norman Head of Private & Nonprofit Management Liability 312-930-2460

Brian Benjamin Head of Financial Institutions 212-458-2927

Europe: Jacqueline McNamee 150 Cheapside London EC2V-6ET +44-207-651-6100

Cat Excess Liability, a division of Chartis

Operating from branches in the U.S., Bermuda and London

William Hopkins, EVP Product Line Manager Cat Excess Liability 32 Old Slip, 19th Floor New York, NY 10005 646-857-1147 e-mail: [email protected] web: www.chartisinsurance.com

2011

Max Available

Max Preferred

$150

$50

All industry classes.

Full cover, Side A, Lead DIC

U.S. Domestic and International

Chubb Robert C. Cox Chief Operating Officer Chubb Specialty Insurance 3 Mountain View Road Warren, NJ 07059 908-903-2203 e-mail: [email protected] web: www.chubb.com

2011 $25 All classes. Chief Underwriting Officer is Jim Bronner, [email protected]; Specialty Products manager is Evan Rosenberg, [email protected]; contact for D&O is Tony Galban, [email protected]; contact for health care Institutions is Beth Strapp, [email protected]; contact for Financial Institutions is Rich Edsall, [email protected]; contact for Private and Not-For-Profit Companies is Michael Maloney, [email protected].

Cincinnati Insurance Co. Scott Unger, Vice President & Underwriting Manager Cincinnati Insurance Co. P.O. Box 145496 Cincinnati, OH 45250-5496 513-870-2407 e-mail: [email protected] web: www.cinfin.com

2011 $10 D&O, Fiduciary, EPLI and Cyber (Blue Chip Policy). All classes written on Cincinnati Insurance Co.

NOTE: Only available through our CIC agency force.



CNA

CNA Pro Daniel Fortin Senior Vice President CNA Pro 333 S. Wabash, 27th Floor Chicago, IL 60604 312-822-5177 e-mail: [email protected] web: www.cnapro.com

2011 Side A

$15 $25

All classes. Contact is Dan Auslander for all not-for-profit, middle market and private businesses. Contact for financial institutions is Thomas Kocaj. Contact for public commercial firms is Thor Beveridge.

CNA — Nonprofit Community Homeowner Associations

Adam S. Collins, CIC Assistant Vice President Ian H. Graham Insurance 15303 Ventura Boulevard, 12th Floor Sherman Oaks, CA 91403 818-742-1429 312-381-0593 (fax) e-mail: [email protected] web: www.ihginsurance.com

2011 $5 MGA for CNA. D&O for nonprofit community homeowner associations, condo associations, commercial associations, timeshares, co-ops, property owners associations and planned urban developments.

Crum & Forster Gary Dubois, President Management and Professional Services Crum & Forster Management and Professional Services Divisions 305 Madison Avenue Morristown, NJ 07960 973-490-6600 973-490-6965 (fax) e-mail: [email protected] web: www.cfins.com

2011 $10 Primary or Excess: D&O/EPL/Fiduciary — public, private, or nonprofit, for virtually all classes. Standard and/or difficult-to-place risks. Lawyers Professional Liability, Accountants Professional Liability, Crime, Miscellaneous Professional Liability, Cyber Liability and Technology E&O are also available.

Endurance

Endurance Risk Solutions (Bermuda)

Forbes Geekie, Senior Vice President Endurance Risk Solutions (Bermuda) Wellesley House, 90 Pitts Bay Road Pembroke HM 08 Bermuda 441-278-0434 e-mail: [email protected] web: www.endurance.bm

2011 $25 Full range of Management and Professional Liability products for Fortune 1000 publicly traded and private commercial companies, financial institutions and law firms.

Endurance Risk Solutions, US

Joseph O’Donnell Executive Vice President Endurance Risk Solutions 767 Third Avenue New York, NY 10017 212-209-6521 e-mail: JO’[email protected] web: www.endurance.bm

2011 $25 D&O, EPLI, Fiduciary and Crime on a stand-alone or blended basis. All classes except financial institutions.


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Energy Insurance Mutual Jill Dominguez, ARM Vice President – Underwriting Energy Insurance Mutual 3000 Bayport Drive, #550 Tampa, FL 33607-8412 800-446-2270 or 813-287-2117 e-mail: [email protected] web: www.eimltd.com

2011 $50 Industry mutual for utilities and energy services industries.

NOTE: Minimum attachment point is $35 million.

Fireman’s Fund Bruce R. Bahn, Senior Product Director Special Risk, Professional Management Liability Fireman’s Fund Insurance Company 33 West Monroe Street Chicago, IL 60603 312-456-5028 877-792-2242 (fax) 847-372-3565 (mobile) e-mail: [email protected] web: www.ffic.com

2011 $10 Primary only. Private company or nonprofit only.

Great American Jonathan G. Starck Vice President Marketing Executive Liability Division Great American 1515 Woodfield Road, Suite 500 Schaumburg, IL 60173 630-897-4299 e-mail: [email protected] web: www.GreatAmericanELD.com


The Hartford

Hartford Financial Products

Michael Dandini, Senior Vice President Hartford Financial Products 277 Park Avenue, 15th Floor New York, NY 10172 212-277-0750 e-mail: [email protected]

Steven Boughal, Vice President & Chief Underwriting Officer Hartford Financial Products 277 Park Avenue, 15th Floor New York, NY 10172 212-277-0436 e-mail: [email protected]


The Hartford — Nonprofits Jason Tharpe, Assistant Vice President Aon Association Services 1120 20th Street, N.W., 6th Floor Washington, DC 20036-3406 202-429-8561 847-953-2651 (fax) e-mail: [email protected] web: www.npo-ins.com

2011 $10 for most classes of nonprofit organizations

MGA for Hartford Financial Products on Nonprofit D&O. Nonprofit classes included but not limited to social service organizations, trade and professional associations, foundations, museums and chambers of commerce. The Nonprofit D&O form has the ability to include D&O, EPL, Fiduciary and Crime coverage parts.



HCC Insurance Holdings

HCC Global Financial Products

Andrew G. Stone, President HCC Global Financial Products 8 Forest Park Drive Farmington, CT 06032 860-674-1900 e-mail: [email protected]

Brian Hickey Senior Vice President HCC Global Financial Products 37 Radio Circle Drive P.O. Box 5000 Mt. Kisco, NY 10549-5000 914-242-7808 e-mail: [email protected] web: www.hcc-global.com

2011 $25 All classes. Uses U.S. Specialty Insurance and Houston Casualty Insurance paper. International business contacts are Thibaud Hervy, CEO and Philippe Vezio, CEO, Spain (34-93-530-7300).

Hiscox Inc. Bertrand Spunberg Senior Vice President Management Liability Hiscox USA 520 Madison Avenue New York, NY 10022 978-276-6245 617-515-2361 (mobile) e-mail: [email protected] web: www.hiscoxusa.com

2011 $15 Primary and excess Not-for-Profit and Private Company management liability products including D&O, EPLI, Fiduciary, Crime, Employed Lawyers as well as Public Officials liability. Coverage offered to most classes of business regardless of size. Licensed or admitted in all states. Admitted primary and excess policies written through Hiscox Insurance Company or State National Insurance Company. Surplus lines primary and excess written on Lloyd’s paper.

Hudson Insurance Group (Odyssey Re)

Jim Hooghuis, Chief Underwriting Officer Hudson Financial Products 176 Mineola Blvd., 2nd Floor Mineola, NY 11501 516-739-7979 e-mail: [email protected] web: www.hudsoninsgroup.com

2011

Side A

$15

$15

Primary, excess and Side A D&O policies for most public company classes including commercial and financial risks of all sizes, REITs and IPOs. Packaged primary (D&O/EPL/Fiduciary/Crime), excess and Side A policies for private and not-for-profit entities for most classes including health care.

ICI Mutual Insurance Co. John T. Mulligan Vice President – Underwriting Department Manager ICI Mutual Insurance Group 1401 “H” Street NW Washington, DC 20005 800-643-4246 202-326-5376 (direct) 202-682-2425 (fax) e-mail: [email protected]

2011 $200 Group captive formed by mutual funds and investment advisors. Sponsored by the Investment Company Institute.


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IronPro Greg Flood, President IronPro One State Street, 7th Floor New York, NY 10004 646-826-6710 646-884-1729 (fax) e-mail: [email protected] web: www.ironshore.com

2011

Side A

$15

$25

D&O all classes and ancillary PTL/EPLI/Fidelity/E&O.

Liberty

Liberty Insurance Underwriters, Inc./ Liberty Mutual Group

Kenia Delgado, Director Howden Specialty Underwriters 9100 S. Dadeland Boulevard Datran 1, Suite 1500 Miami, FL 33156 786-513-2678 786-228-0521 (fax) e-mail: [email protected] web: www.howdenspecialty.com

2011 $10 MGA for Liberty Insurance Underwriters, Inc. Private company business with total assets of up to $250 million. D&O/EPL/Fiduciary/Crime/K&R

Liberty Mutual Group/ Liberty International Underwriters

Trevor Howard Senior Vice President Management Liability Liberty International Underwriters 55 Water Street New York, NY 10041 212-208-4139 212-208-4266 (fax) e-mail: [email protected] web: www.libertyiu.com

2011 $25 Primary and excess management liability products for firms of all sizes, including public D&O, private D&O and not-for-profit D&O; financial institutions D&O/E&O; International D&O; Real Estate Investment Trusts (REITs); Private Equity/Venture Capital; Employment Practices Liability; Pension Trust/Fiduciary Liability; Fidelity coverage.

Markel Insurance Company

Salvatore Pollaro Managing Director Management Liability Markel Insurance Company 708 Third Avenue New York, NY 10017 212-551-2281 e-mail: [email protected]

2011 $10 Target Market: Private companies & not-for-profit organizations up to $750M in annual revenues on a primary and excess basis: EPL, D&O, Fiduciary

Publicly Traded Companies up to $2B in Market Capitalization on an Excess basis: EPL, D&O, Fiduciary

All classes eligible except Financial Institutions.

Admitted and Surplus paper available.

Monitor Liability Managers, LLC

Randy Mrozowicz Executive Vice President – Underwriting Monitor Liability Managers, LLC 2850 W. Golf Road, Suite 800 Rolling Meadows, IL 60008-4039 847-806-6590 ext. 531 e-mail: [email protected] web: www.monitorliability.com

2011

Public Company

Private Company

Nonprofit Org.

$10

$5

$5

Primary, excess and Side A with DIC for Public Companies. All classes except financial institutions, insurance companies and securities broker/dealers. Public and private companies and nonprofit organizations, primary and excess. All products offer EPLI. All A+ rated W.R. Berkley member company carriers. Issuing paper: Admiral Insurance Company, Berkley Insurance Company and Carolina Casualty Insurance Company. Public D&O contact is Joe Haltman 847-806-6590, ext. 532; private company and nonprofit contact is Tom Mathias 847-806-6590, ext. 510.



Navigators

National Indemnity (Berkshire Hathaway)

Ajit Jain, President Specialty Risk Division Berkshire Hathaway 100 First Stamford Place Stamford, CT 06092 203-363-5205 203-363-5221 (fax) e-mail: [email protected]

2011 $100 All classes. Specializes in large, difficult-to-place accounts.

NOTE: Generally, minimum premium is $1 million. Capacity up to $1 million or more available through negotiations on an individual basis.

Navigators Insurance Company/Navigators Specialty Insurance Company/Navigators Syndicate 1221 at Lloyd’s of London

Christopher Duca, President Navigators Pro One Penn Plaza, 32nd Floor New York, NY 10119 212-613-4305 212-613-4302 (fax) e-mail: [email protected] web: www.navg.com

2011 $25 All classes. D&O and EPL for publicly traded and privately held firms worldwide. D&O contact is Scott Misson at [email protected] or (212-613-4214). International D&O contact is Carl Bach, III at [email protected] or 011-44-207-220-6976.

Old Republic Martin Perry, President Chicago Underwriting Group 191 North Wacker Drive, Suite 1000 Chicago, IL 60606-1905 312-750-8800 e-mail: [email protected] web: www.cug.com

2011

Side A

$15

$25

All classes. We are interested in technology and life science accounts on a primary and excess; and commercial and insurance company accounts on an excess basis.

OneBeacon Insurance Company

John Chase, Senior Vice President & Chief Underwriting Officer OneBeacon Professional Insurance 199 Scott Swamp Road Farmington, CT 06032 860-321-2555 860-321-2890 (fax) 860-543-4743 (mobile) e-mail: [email protected]

Stacy Paquet, Vice President Management Liability 77 Water Street, 16th Floor New York, NY 10005 212-440-6521 917-828-2228 (mobile) e-mail: [email protected] web: www.onebeaconpro.com

2011 $20 D&O and related lines as follows:

Health care D&O — Hospitals, Managed Care, Long Term Care. Medical Facilities

Not for Profit — Education, Social, etc.

Private Company — Small and Large (up to $10M capacity)


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Philadelphia Insurance Companies

Thomas R. Herendeen, RPLU, AFSB Senior Vice President, Underwriting Management and Professional Liability One Bala Plaza, Suite 100 Bala Cynwyd, PA 19004 610-617-7623 610-227-0027 (fax) e-mail: [email protected]

2011 $20 Coverage available for nonprofit organizations and private commercial companies. Write both primary and excess.

RLI Insurance Company David Shanosky, CPCU, CPA Executive Products Group RLI Insurance Company 47 Maple Street Third Floor Atrium Summit, NJ 07901 908-598-8375 e-mail: [email protected] web: www.rli-epg.com

-or-

Chad Berberich RLI Executive Products Group 909 Lake Carolyn Parkway, Suite 800 Irving, TX 75039 972-677-2116 e-mail: [email protected]


RSUI Group Greg Buonocore, Senior Vice President RSUI Group 945 East Paces Ferry Road, Suite 1890 Atlanta, GA 30326 404-760-4969 e-mail: [email protected] web: www.rsui.com

2011 $20 All classes. Company is admitted in 50 states and uses RSUI Indemnity (admitted) paper and Landmark American (non-admitted) paper. Contact person for nonprofit is Michelle Eason. Subsidiary of Allegheny Corp. Contact person for private company business is Mark Hanington.

Sargasso Mutual Insurance Companies

Wanette M. Vann, Underwriter Sargasso Mutual Insurance Company, Ltd. Victoria Hall, 11 Victoria Street Hamilton HM 11 Bermuda 441-298-6620 e-mail: [email protected]

2011

Primary

Excess

Side A Only

$15

$15

$15

$15M Primary or Excess Side A & B. $15M Excess Side A only. Coverage is available to eligible U.S. or Canadian domiciled life insurance companies. Note: managed by Marsh IAS Management Services (Bermuda) Ltd.

Scottsdale (Nationwide)

Freedom Specialty Craig Landi Senior Vice President Freedom Specialty 7 World Trade Center New York, NY 10007 212-329-6901 e-mail: [email protected] web: freedomspecialtyins.com

2011 $20 All classes of D&O and related lines of business.



Scottsdale Insurance Company

Bernice Holloway, Vice President Negley Associates 103 Eisenhower Pkwy., Suite 101 Roseland, NJ 07068 973-830-8500 973-830-8585 (fax) e-mail: [email protected] web: www.jjnegley.com

2011 $5 MGA for Scottsdale for nonprofit social service agencies and mental health facilities.

Starr Indemnity & Liability Company

Jim Pittinger Vice President, Financial Lines Division Manager Starr Indemnity & Liability Company 399 Park Avenue, 8th Floor New York, NY 10022 646-227-6573 917-375-1141 (mobile) e-mail: [email protected]

2011 $15 Primary and Excess; Public, Private and Not For Profit; Commercial and Financial Institutions.

Torus US Services Inc. Jeffrey Grange SVP Head of Management Liability Torus Insurance 5 Harborside Plaza, Suite 2600 Jersey City, NJ 07311 201-830-2534 e-mail: [email protected] web: www.torusinsurance.com

2011 $10 Management Liability products offered:

D&O, EPL, Fiduciary and Excess Crime for Public, Private, Nonprofit and Financial Institution risks

Target Classes: Consumer products, services, manufacturers, aerospace, defense contractors, transportation, energy, natural resources, utilities, hospitality, oil & gas refiners, technology and specialty retail

Opportunistic: Homebuilders, pharmaceutical, life sciences, health care, casinos and construction.

Travelers

Travelers Carl Holbig, Public D&O Product Manager Bonds & Financial Products Travelers One Towers Square Hartford, CT 06183 e-mail: [email protected] web: www.travelers.com/business-insurance management-professional-liability

2011 $25 Considers all classes; primary and excess. Public company liability contact is Bryan Kocon 678-317-7892; contact for private and nonprofit business is Peter Herron 860-277-1961; contact for financial institutions is Kristin Roger 860-277-8553. Issuing paper includes: Travelers Casualty and Surety Company of America, Travelers Excess and Surplus Lines Company, St. Paul Mercury, and St. Paul Surplus Lines.


34 towerswatson.com

G.J. Sullivan Co. Paul Bubnis, Vice President G.J. Sullivan 625 The City Drive, Suite 400 Orange, CA 92868 714-621-2340 e-mail: [email protected] web: www.gjsullivan.com

2011 $25 Managing General Underwriter for the Travelers Wrap+® for Health Care Organization Directors, Officers and Trustees Liability and Health Care Organization Employment Practices Liability products.

Western World Insurance Company

Gregg C. Rentko, CPCU, AU, MSIM Second Vice President Brokerage Division Western World Insurance Company 400 Parson’s Pond Drive Franklin Lakes, NJ 07417 201-847-2820 e-mail: [email protected] web: www.westernworld.com

2011 $5 Tudor Pro and Tudor Specialty Liability have been merged to form Western World Brokerage-Professional, which is responsible for underwriting all open brokerage professional and management lines. While the lead line remains Nonprofit D&O, Brokerage-Professional is increasing its focus on Private Company, Municipal and School Board Legal Liability. Management Liability is now written on Western World Insurance Company paper in all states, except New York (Tudor).

United Educators Ins. A Reciprocal Risk Retention Group

Bryan S. Elie Vice President, Underwriting United Educators Insurance RRG Two Wisconsin Circle, 4th Floor Chevy Chase, MD 20815-9913 301-907-4908 ext, 426 e-mail: [email protected] web: www.ue.org

2011 $25 Risk Retention Group for universities, colleges, non-public elementary and secondary schools. Write educators legal liability. In addition, write public K-12 but only for limits up to $5 million.

W.R. Berkley

(Berkley Professional Liability, LLC)

Paul A. Brophy Senior Vice President Berkley Professional Liability, LLC 14 Wall Street New York, NY 10005 212-618-2903 212-618-2940 (fax) e-mail: [email protected] web: www.berkleypro.com

2011

Side A

$25

$25

All classes of D&O and related lines of business.

XL Insurance

XL Insurance (Bermuda) Ltd.

Matthew G. Irvine Senior Vice President and CUO XL Insurance (Bermuda) Ltd. Brian O’Hara House One Bermuda Road Hamilton HM 08 Bermuda 441-294-7378 e-mail: [email protected] web: www.xlcapital.com

2011 $50 All classes. Side A can be written on a primary, excess or excess/DIC basis. Minimum attachment point on Side B and C is $25M. Maximum capacity for B&C coverage is $25M. No B&C coverage is available for financial institutions or pharmaceutical companies.



XL Professional USA John T. Burrows, Senior Vice President XL Professional 100 Constitution Plaza Hartford, CT 06103 860-948-1809 860-948-1899 (fax) e-mail: [email protected] web: www.xlprofessional.com Bernie Horovitz Executive Vice President Chief Underwriting Officer 100 Constitution Plaza Hartford, CT 06103 860-948-1819 860-948-1899 (fax)

2011 $50 Full coverage ABC and up to $50 million Side A DIC. All classes of business on primary and excess basis.

Zurich

Financial Institutions Christopher A. Taylor Head of Financial Institutions Zurich Financial Institutions 600 Red Brook Boulevard, Suite 600 Owings Mills, MD 21117 410-559-8800 410-559-8802 (fax) e-mail: [email protected] web: www.zurichna.com/fe

2011 $15 Writes D&O/E&O for insurance companies, credit unions, regional and community banks and savings institutions. Writes primary coverage and will consider excess coverage.

Zurich Global Corporate UK

George Melides Head of Commercial D&O for GCUK and UKGI Zurich Global Corporate U.K. London Underwriting Centre Three Minister Court, Mincing Lane Suite No. 3, 3rd Floor London EC3R 7DD 011-44-207-648-3008 e-mail: [email protected] web: www.zurichlondon.com

2011 $50 All classes. Does not write U.S. domiciled organizations. Issuing paper is Zurich Insurance, Plc

Zurich Specialties William Fahey, Senior Vice President Management Solutions Group Zurich Specialties One Liberty Plaza, 30th Floor New York, NY 10006 212-553-5629 e-mail: [email protected] web: www.zurichna.com

2011 $25 Primary and excess D&O for midsize and large organizations in most industries. Zurich offers corporate D&O featuring Retired Independent Directors Side A coverage, Environmental Mismanagement claims extension, enhanced Side A coverage, and enhanced definitions. Also available are solutions for international premium tax and local policy placement issues.


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Towers Watson places D&O and related Executive Liability coverages with insurers on behalf of our corporate clients. Towers Watson also provides D&O liability and insurance program reviews for organizations seeking an independent review of risks and coverage.

Executive Liability Insurance Brokerage Towers Watson provides retail brokerage services as part of our risk management and insurance consulting to clients. We provide a sophisticated alternative to traditional insurance intermediaries that combines seasoned insurance brokerage expertise with the strong analytical and consulting expertise of Towers Watson. Clients can get the benefits of the D&O liability and insurance program review described above, with the additional benefit of having Towers Watson also place the insurance program in the insurance market.

Executive Liability Reinsurance Towers Watson assists insurance company clients with all aspects of D&O and related lines. Our combined brokerage and insurance consulting expertise provides D&O writers with a broad menu of services, including:

• Primary and excess rate making • Increased limit factor benchmarking • Insurance policy comparisons • Reinsurance contract wording analysis and review • Stochastic modeling of alternative reinsurance programs to compare the expected costs and impact on the volatility of retained risk

• Monitoring major claims affecting this line of business on a global basis

Towers Watson staff is dedicated and experienced in negotiating and servicing the specialty product lines associated with D&O liability for U.S. and international exposures.

D&O Liability and Insurance Program Review A D&O insurance program review provides an independent assessment of the reasonableness and quality of the D&O program as it relates to the organization and its risk profile.

Towers Watson works with clients to do the following:

• Explore the company’s objectives with respect to its D&O insurance program. For example, is the company trying to minimize costs? Does it need to cover its own liability or payments made to directors and officers? Should it increase the scope of its coverage to ensure that directors and officers are comfortable with their level of protection?

• Check corporate indemnification provisions to see if there are opportunities to improve the breadth of coverage to directors and officers.

• Ensure a thorough understanding of current issues in the litigation environment and the current insurance marketplace, including current trends in D&O claims and insurance purchasing practices.

• Identify the best structure for the program based on the company’s unique risk profile, goals for the coverage and appetite for risk.

• Review existing programs for consistency with the company’s purchasing philosophy, program cost and current market conditions regarding capacity, pricing and coverage restrictions.

Insurance Placement, Reinsurance Intermediary Services and Insurance Program Reviews

Appendix B

Contacts

Lawrence A. Racioppo [email protected] +1 203 363 1907

Michael Turk [email protected] +1 203 351 5193

Lorraine Linehan [email protected] +1 617 638 3769

Nancy Serio [email protected] +1 860 843 7149

Copyright © 2012. All rights reserved. NA-2011-22159

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About Towers WatsonTowers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of employee benefits, talent management, rewards, and risk and capital management.