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Recommendations for a Successful D&O Underwriter Meeting

What you need to know to risk differentiate your company in a “hard” D&O market

In today’s challenging D&O insurance market, it can feel like you are a “market taker” rather than a “market maker” because market conditions have led to increased rates, increased retentions and less capacity, particularly in the primary D&O layer. The renewal process requires more strategy and analysis than in previous decades.

There is cautious optimism around new capacity and new entrants beginning to emerge in the D&O market in 2021,[1] which should introduce competition. Insurance buyers, however, must still think and act creatively and make sure you leave no stone unturned when renewing your D&O program.[2]

That includes the critical underwriting meeting you must have with the global D&O insurance market as you work to take control of your program. Together with your broker, and preferably with your CEO and CFO, you must tell a strong narrative about your organization’s financial, operational and cultural strengths with the underwriters to position your company for the most favorable terms possible. A well-executed meeting with the underwriter also allows the risk manager to deliver on internal commitments to leadership and the board. While there are competing stakeholder priorities that are especially challenging in a hard market, a successful underwriting meeting can set the foundation for favorable negotiations and brokering process. 

Here are four recommendations for preparing to meet with the underwriter and setting your company up for a positive result on all fronts.


Prepare, prepare, prepare

You need to spend much longer preparing for the meeting than you’ll spend in the meeting itself. That includes prepping the CEO and CFO to address this particular audience. Both will ultimately lead the presentation, but they’re not as close to the various risk areas as you are.

The deck you’ll use in the meeting is a modified version of your investor deck targeted to your audience. The underwriter will have familiarized themselves with your public filings, so your goal will be to frame that information according to the underwriter’s priorities.

The relationship with your underwriter matters a lot in the hard market, so it is important to learn about them as individuals:

  • Work with the broker to gather a list of questions they will likely have
  • Do a prep call with your broker to run through the questions and the answers you want to give
  • Understand their personality and areas of focus

The virtual environment has made it easier to get more senior underwriters on the carrier team in the meeting. You may want to consider meeting remotely or taking a hybrid approach, with key people in the room and everyone else calling in over videoconference.

If you’re going to meet remotely, smaller meetings tend to be more successful. But don’t cut the CEO from the invite list; the CEO’s presence signals to the underwriter that the company views D&O as a high priority.

The insurer’s meeting participants count—ensure you aren’t meeting solely with a junior underwriter who doesn’t have decision-making authority and will have to relay the contents of the presentation to someone else.


Tell the story of the business

The purpose of the presentation is to color in all the details beyond what’s available in the company's public filings. A successful meeting will follow this structure:

1. Explain the company’s mission, market opportunity and the needs it serves.

Give the underwriter an accurate view of the current status of company operations and where they’re headed in the next 12 months. It's important both to talk about the positives and to address any headwinds when telling your story. Constructing a favorable narrative around your headwinds can help the underwriter feel more comfortable with your approach.

2. Give hard metrics about the financials, balance sheet and debt.

An underwriter would rather see steady growth than a sharp upswing in key underwriting metrics such as market capitalization. Highlight your strengths, such as your cash position, being a closely held company or key differentiators in your industry. But it’s also important to be realistic about the financial challenges you face.

3. Conclude with the ways the company is mitigating emerging risks.

Event-driven litigation has become a key exposure for directors and officers, with boards being accused of breach of fiduciary duty for failure to execute on plans.[3] Such risks that could create D&O issues include cyber, DE&I, ESG, employment and COVID-19. Demonstrate to the underwriter that you’re putting your policies into practice: show your diverse board (or plans to address) and detail how your company is bringing its diversity and inclusion policies to life, and also the steps you’re taking for environmental protection.


Strike the right tone

The C-suite is very comfortable speaking to an audience of equity investors and telling them the best version of the company’s story. But with an underwriter audience, it’s helpful to stick to a more conservative version.

The underwriter’s focus will be on risk, so take a cautious, realistic approach. But they will expect you to be forthcoming, so incorporate a warm and open dialogue style. In the most successful meetings, the underwriter will feel connected to the person presenting, and feel assured that the presenter is answering all questions to the best of their ability. After all, the D&O underwriters are underwriting to the Board and management and your ability to execute on the proposed corporate goals.

This means that the risk manager and CFO will need to thoroughly rehearse the meeting until the CFO is comfortable communicating with the right tone.


Build in time for questions

If you book an hour for the meeting, it is recommended you plan 30 minutes of content and leave plenty of time for questions. If you talk for most of the hour, the underwriter may leave the meeting with unanswered questions, which puts you at a disadvantage when it comes to their decision. Rehearsal comes into play here, too. You should arrive at the meeting confident that your content will fit into 30 minutes without rushing.

In successful meetings, the presenter will answer questions as they go, rather than leaving them all for the end. That way, the underwriter gets a chance to ask all their questions and feels confident about the risk future of your company.

Finally, keep an eye on the clock so you don’t go over time. Show the underwriter that you respect their time by sticking to the schedule.

[1] Executive Risk: Reflections on 2020 and Outlook for 2021

[2] Taking Control of the Market and D&O Checklist

[3] Board Diversity Litigation as an Emerging Directors’ & Officers’ Liability Risk