Potential Green Shoots of Change for the Australian D&O Market

The D&O market for Australian insureds has been subject to ongoing profitability pressure, which has substantially tempered insurer appetite for participation on listed companies’ D&O programs, reducing the overall size of the market and driving sharp increases in premiums and deductibles.

As part of its implementation of emergency measures in response to COVID-19, the Federal government announced greater regulation of litigation funders together with an inquiry into litigation funding and the regulation of class action industry by the Parliamentary Joint Committee on Corporations and Financial Services.

The Federal government also exercised its powers to assist companies and their officers through the announcement of a (short term) relaxation of the continuous disclosure rules for publicly listed companies.

These announcements offer a way forward for renewed optimism and further scope for regulation change in the industry.

This paper discusses the relevant changes and what this may mean for the D&O market in Australia.