US directors and officers liability insurers posted their best loss results in more than a decade in 2024, thanks in part to reserve releases from earlier hard-market years, according to a new AM Best report.

The report, Changing Environment Brings New Risks to D&O Insurers, found that while D&O premium volume declined 6 per cent in 2024, strong results in the fourth quarter helped to offset early-year losses. Total first-quarter premiums of $2.2 billion were the lowest in four years, but picked up in the final three months.

Still, AM Best analysts warned of growing challenges tied to past soft-market claims from 2016-2019 and a complex modern risk environment, including the rise of artificial intelligence.

“Corporate executives continue to face a variety of challenges in managing complex risks amid rising uncertainty,” said David Blades, associate director at AM Best.

The report also noted that D&O underwriters are benefiting from more conservative pricing and policy terms put in place during the 2020-2021 hard market, but added that continued profitability could spark rate pressure.

“Continued profitable results could lead to sustained pressure on pricing,” said AM Best’s Christopher Graham.