24 POLICY Special edition 2023 Lloyd’s Broker Guest Krieger, Specialising in the Israeli Market, Provides an Update on London’s Dynamic Appetite for Financial Lines Risks By Alon Miller, CEO, Guest Krieger Guest Krieger, since its foundation nearly 50 years ago, has long acted as London’s leading specialist broker for Israeli business, servicing many US traded Israeli companies, local retail brokers, and local Insurers across several classes of insurance, with a particular expertise in Financial Lines (both commercial Directors & Officers liability as well as D&O and Professional Indemnity for Financial Institutions). The Financial Lines Insurance market across the world has seen unprecedented changes in recent years, experiencing steep increases in premium and coupled with rapid contraction in available capacity. This was fast-tracked by the uncertainty of the COVID-19 pandemic and increase in litigation and settlement values. In London, the D&O insurance market is a dynamic and rapidly evolving one, with new challenges and opportunities emerging all the time. Very quickly, D&O rates became attractive enough to entice new entrants to opportunistically capitalise on the high premiums. Whilst these rates were increasing and capacity was contracting, underwriters had the option to step back from territories their analysts deemed unprofitable. For many carriers, Israel was one of these and this caused hardening of D&O rates for Israeli business in particular. One of the key features of the London D&O insurance market is its competitiveness. The increase in a number of insurers coming back to operate in this space, each offering its unique own set of products and services according to a specific appetite for risk, has caused the market to soften as Insurers look to grow their books with a wider scope for new business from a variety of territories. As rates began to turn downwards, we have seen these same insurers placing Israeli business back to within appetite, which has opened the opportunity for insureds to get much more competitive results both in premiums as well as in breadth of cover provided by their policy compared to previous years. Furthermore, the hard market brought about a rapid reduction in appetite for ancillary lines such as Crime & Employment Practices Liability as insurers were earning sufficient premium on the D&O coverage. The turning of market conditions has caused an uptick in interest in these ancillary lines, in particular if it leads to the insurer securing a favourable position on the D&O program which brokers are employing to facilitate greater savings in premiums. Another trend in the London D&O insurance market is the increasing focus on cyber risk. With cyberattacks becoming more frequent and sophisticated, companies and their directors and officers are at greater risk of being held liable for data breaches and other cyber-related incidents. In addition to cyber risk, there are other emerging risks that companies and their directors and officers need to be aware of. For example, environmental, social, and governance (ESG) issues are becoming increasingly important, and companies may face legal action if they fail to address these issues & their relevant disclosures adequately. Insurers are starting to respond to this trend by offering ESG-specific coverage options. Overall, the London D&O insurance market is an adaptive and competitive one, with insurers offering a wide range of products and services to meet the needs of their clients, and Israeli companies are back within the appetite for many Insurers, in Lloyd’s and the company market. However, companies and their directors and officers need to be vigilant and carefully consider their coverage options, particularly considering emerging risks such as cyber and ESG and especially for multinational companies, tailor their policy’s terms and conditions to the territories they operate in. By working closely with their brokers and insurers and staying up to date with the latest developments in the market, Insureds can implement a clear strategy personalised to their preferences and ensure that they are adequately protected against the risks they face as well as maximizing the current favourable market conditions. Guest Krieger’s CEO, Alon Miller, shares how the London Market has opened to write more Israeli business across many specialist classes of insurance, in particular Financial Lines
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