The following are excerpts from Advisen’s white paper on D&O claims trends for the second-quarter 2015. There was also a webinar on the topic. Click the hyperlink to find the paper, webinar and slides used during the webinar.
At the midway point of 2015, of the various types of lawsuits and enforcement actions tracked by Advisen that could trigger coverage under a D&O policy, the jury is still out as to whether the downward trend in new events will continue for a fourth consecutive year. Although the second quarter saw an 8 percent decline in new activity from the same quarter a year ago, total events increased just slightly from the previous quarter.
As a result, the year-to-date total is only 2 percent less than at the same point last year. If this trend continues, the second half of the year could see an increase in litigation activity and an upward adjustment in the annualized estimate displayed below.
Accounting for 64 percent of the quarter’s total filings, an increase of 4 percent from the first quarter, capital regulatory actions by far remained the leading source of new securities suit filings in the second quarter. In a distant second, securities class actions accounted for 14 percent, followed by merger objection suits at 12 percent.
As they have for every quarter since before the financial crisis, financial firms remained the leading source for new filings and enforcement actions. Thirty percent of the new filings in the second quarter named companies and their directors and officers in the financial service sector. While far-and-away the largest source of new filings, they are down substantially from a peak of 40 percent in 2008 and 2009. After four consecutive quarters as the second most active sector, industrials was replaced by information technology in the second quarter.
Josh is an Editor at Advisen in the Research & Editorial division. He is the lead editor responsible for several of Advisen’s Front Page News editions and he also originates custom research on behalf of Advisen’s largest insurance company clients. Contact Josh at [email protected].
