CHICAGO, Sept. 21, 2010 (GLOBE NEWSWIRE) -- Improved corporate governance, fewer securities class-action lawsuits and ample capacity drive the soft directors' and officers' liability market, according to the annual D&O Peer Benchmarking Report presented by NASDAQ OMX and Aon.
The continued softening of the D&O insurance market is welcomed by major public corporations as they strive to reduce costs and improve bottom line performance. NASDAQ OMX, the world's largest exchange company, released the report today in association with Aon Risk Solutions, the global risk management business of Aon Corporation (NYSE:AON).
Nearly 600 NASDAQ OMX companies from 46 states and 18 countries participated in the survey. According to the report, these organizations purchased more than $21 billion in limits and $370 million in premiums, and owned 2,245 policies in 2009. The coverage was placed through 62 different insurance brokers.
"Public companies are under tremendous pressure to trim expenses, and this benchmarking analysis serves as an eye opener for our member companies," said Demetrios Skalkotos, senior vice president of NASDAQ OMX Global Corporate Solutions. "Knowing how much D&O coverage your peers are buying is helpful, but it can be even more powerful to know how much they are paying for it."
For the majority of S&P companies, D&O pricing declined in 2009. According to the report, even financial institutions, which were the only industry group in last year's survey to see an increase, experienced a decline.
The D&O Peer Benchmarking Report outlines six best practices for organizations to follow when looking to purchase or analyze their coverage:
- Examine the D&O policy to determine corporate executive indemnification provisions
- Question any generic worldwide coverage language in the D&O policy; it may be inadequate
- Recognize what triggers a claim under the D&O policy
- Scrutinize the limits of the excess policies
- Understand how coverage under the D&O policy is affected by the wrongful acts of others
- Know how the organization and the directors and officers are protected during a financial crisis
The report notes that only 178 U.S. federal securities class-action lawsuits were filed in 2009, reflecting a decrease of 20 percent from 2008. Outside the U.S., 293 actions were brought against directors and officers in more than 50 countries.
"We are starting to see U.S. financial regulatory agencies become more active and aggressive as the SEC makes reinvigorating its enforcement program a top priority," said Ralph Semeraro, managing director of Aon Risk Solutions' Financial Services Group. "Now more than ever, it is imperative for organizations to have solid directors' and officers' liability coverage in place."
"The D&O peer survey provides comprehensive, detailed buying data in a clear, concise manner that allows our board to make an informed D&O purchase that is appropriate for our company's needs," said Dorrance Lamb, chief financial officer of Performance Technologies (Nasdaq:PTIX).
Download a two-page summary of the 2010 NASDAQ OMX/Aon Directors' and Officers' Liability Insurance Peer Benchmarking Report at http://www.aon.com/do.
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About NASDAQ OMX
The NASDAQ OMX Group, Inc. is the world's largest exchange company. It delivers trading, exchange technology and public company services across six continents, with over 3,600 listed companies. NASDAQ OMX offers multiple capital raising solutions to companies around the globe, including its U.S. listings market, NASDAQ OMX Nordic, NASDAQ OMX Baltic, NASDAQ OMX First North, and the U.S. 144A sector. The company offers trading across multiple asset classes including equities, derivatives, debt, commodities, structured products and exchange-traded funds. NASDAQ OMX technology supports the operations of over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries. NASDAQ OMX Nordic and NASDAQ OMX Baltic are not legal entities but describe the common offering from NASDAQ OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius. For more information about NASDAQ OMX, visit http://www.nasdaqomx.com. *Please follow NASDAQ OMX on Facebook (http://www.facebook.com/nasdaqomx) and Twitter (http://www.twitter.com/nasdaqomx).
Aon Corporation (NYSE:AON) is a leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 36,000 colleagues worldwide, Aon delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007, 2008 and 2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.
CONTACT: Aon Corporation Kelly Drinkwine 312.381.2684 firstname.lastname@example.org The NASDAQ OMX Group, Inc. Jolene Libretto 646.441.5220 email@example.com
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