Aon: D&O rates fall 16.4% in Q2

Business Insurance:

That is the largest decrease since the fourth quarter of 2007 and the second consecutive quarter in which prices declined by double digits, according to the [Aon] report.

Aon attributed the price decreases to less frequent securities class action filings and to a “mini-bull” market run between March of 2009 and March of this year, the report said.

Companies are using the lower rates to buy higher limits, thus protecting their directors more. I always thought companies budgeted $X for D&O and always spent $X. If rates fall, they buy more instead of dropping the savings to the bottom line.

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