Comprehensive Analysis of D&O Insurance Trends
The Baldwin Group, in partnership with Nasdaq, Inc., has released its 2025 Directors & Officers (D&O) Benchmarking Report, providing an in-depth examination of D&O insurance trends among public companies across various industries and market capitalizations. Now in its fourth year, the report confirms a continued decline in premium rates and retentions for D&O insurance but also uncovers a growing disparity between the coverage companies are purchasing and their actual needs.
Key Findings
The report reveals that average premium costs and retentions for D&O insurance continued to decrease in 2024, extending a three-year trend of softening market conditions. Specifically, average retention levels dropped from $2.5 million to $1.5 million, and the average premium for $5 million in limits fell to $277,985, down from $315,222 the previous year. The technology and healthcare sectors led in rate reductions, with decreases of 15.0% and 13.6%, respectively.
However, the benchmarking data suggests that many companies, particularly mid-cap firms, are still purchasing more insurance than necessary. According to Michael Tomasulo, Senior Managing Partner & National Practice Leader at The Baldwin Group, “Our data shows that while a company may be purchasing $40 million in D&O limits, their actual claims exposure might be a fraction of that – essentially purchasing limits they may never actually need.”
Insights into Risk Exposure
Data from Stanford Securities Litigation Analytics and The Baldwin Group’s benchmarking indicate that a public company with a market capitalization between $500 million and $1 billion faces an average settlement of $8.2 million in securities class actions. The total risk exposure, including legal costs and other factors, ranges from $12 million to $15 million. Yet, many companies in this category are buying up to $40 million in coverage, indicating a potential over-insurance gap of $15 to $20 million.
Dan Galbraith, President of The Baldwin Group and CEO of Retail Brokerage Operations, emphasized the importance of strategic insurance decisions. “At Baldwin, we advise companies on the smartest path forward based on their actual risk exposure, business goals, and capital priorities. This report gives leaders the clarity to right-size their D&O programs—not just to save money, but to ensure that every dollar spent supports their business growth, governance, and protection.”
Practical Applications
The report offers detailed benchmarking for premium changes by sector and market capitalization size, allowing companies to compare their renewal experiences with those of similar peers. While the overall average rate change in 2024 was -9.7%, the report stresses that premium savings are insignificant if D&O programs remain misaligned with actual risk exposure.
For more information or to access the full report, visit www.baldwin.com.
About the 2025 D&O Benchmarking Report
Produced in collaboration with Nasdaq, The Baldwin Group’s D&O Benchmarking Report provides a data-driven overview of public company D&O program structures by industry and market capitalization. The findings are based on data from over 250 companies and offer unique insights into the alignment between purchased insurance limits and real-world claim activity. It’s essential to note that this report is intended as a guide and does not constitute individualized financial advice. The full report is available to companies that completed the benchmarking survey.
About The Baldwin Group
The Baldwin Group is an independent insurance distribution firm that provides expertise and insights to help clients achieve their goals. With a comprehensive approach to risk management, insurance, and employee benefits, they support over three million clients across the United States and internationally. For more information, please visit www.baldwin.com.
