Nearly 100 listed companies plan to purchase directors and officers (D&O) liability insurance in the first quarter

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Our reporter Yang Xiaohan

Recently, the listed companies’ Q1 reports on their Directors and Officers Liability Insurance (D&O insurance) coverage plans have been released. 《Securities Daily》 reporters, based on data from Eastmoney Choice,统计 that in this year’s first quarter, nearly a hundred listed companies have announced D&O insurance coverage plans, and the number of companies to be insured increased year over year.

Experts interviewed said they expect the D&O insurance market to continue developing in the future, showing characteristics such as a steady rise in both the number of insured companies and penetration rates, as well as increasingly differentiated coverage solutions.

Planned number of insured companies increased year over year

D&O insurance is a policy that provides protection for directors, supervisors, and senior executives of listed companies during their performance of duties. If they are held liable due to work negligence or improper conduct, the insurer compensates for legal litigation expenses and assumes other corresponding civil compensation responsibilities.

Data show that in this year’s first quarter, 99 listed companies announced plans to purchase D&O insurance, a figure higher than the same period last year.

In response, Longge, deputy director of the Innovation and Risk Management Research Center at the University of International Business and Economics, told 《Securities Daily》 reporters that the increase in the number of insured companies in the first quarter was mainly driven by the combined effect of stricter law enforcement and real-world precedents, which strengthened risk awareness among listed companies. At the same time, investors’ awareness of safeguarding their rights has also been increasing, which has boosted demand for companies to share executives’ duty performance risks through insurance.

In recent years, the number of listed companies planning to purchase D&O insurance has generally shown a fluctuating upward trend. A report jointly released by Shanghai Jianwei Law Firm, Xianlü Technology (Beijing) Co., Ltd., and Mingya Insurance Brokerage Co., Ltd., the “China Listed Company D&O Insurance Market Report (2026),” shows that in recent years, except for 2023 when the number of listed companies disclosing plans to buy D&O insurance declined year over year, in other years it increased year over year. In 2025, 643 A-share listed companies issued announcements disclosing plans to purchase D&O insurance, representing a 19% year-over-year increase.

Wang Min, who has more than ten years of experience in liability insurance and is currently a senior consultant at Shanghai Jianwei Law Firm, told 《Securities Daily》 reporters that since 2019, the Securities Law and the Company Law, which have been implemented successively, have played a major role in driving the rapid increase of D&O insurance penetration in the A-share market. By the end of 2025, the number of listed companies announcing plans to purchase D&O insurance continued to rise. This growth trend further reflects the broad adoption of D&O insurance in the A-share market and the continuous improvement in market recognition.

Coverage plans will become more differentiated

Another feature in the development of the D&O insurance market in recent years is the continued decline in D&O insurance premium rates. This trend is closely related to the relatively small number of D&O insurance claims cases in the current market.

The “China Listed Company D&O Insurance Market Report (2026)” shows that since 2017, the simple average premium rate for D&O insurance in A-shares (calculated based on the premium budget and insured amount in listed company announcements) has generally been on an upward trend—from 3 per thousand in 2017 to 6 per thousand in 2022. In 2023, the D&O insurance premium rate saw a turning point, showing a downward trend, which has continued through the entire 2025 fiscal year. By the fourth quarter of 2025, the simple average D&O insurance premium rate was below 5 per thousand.

Wang Min believes this change is mainly because in recent years there have been more insurance companies underwriting D&O insurance, and the market’s underwriting capacity has grown rapidly. Meanwhile, D&O insurance claims reports tend to be delayed, and the lack of transparency in market claims information leads to irrational competition, which in turn keeps pushing the market premium rates downward.

However, D&O insurance pricing factors are relatively complex and are affected by multiple elements. Wang Min reminds that besides market competition, insurers also need to comprehensively consider the insured company’s industry environment, stock price performance, administrative penalties, litigation risks, corporate governance, financial condition, and the personal situation of the directors, supervisors, and senior executives. Therefore, the premium levels between different insured companies may differ significantly from the market’s average premium rate.

It is worth noting that because D&O insurance covers a relatively broad range of underwriting liabilities, the amounts involved in D&O insurance payouts are often large. Data show that in the first three quarters of 2025, there were 13 disclosed D&O insurance claims cases, with total claim amounts of RMB 89.47 million.

Against this backdrop, insurers need to strike a balance between underwriting costs and risk management. Longge believes insurers should be wary of the future solvency risk that “low-price competition” in D&O insurance may trigger. In a context of information opacity, insurers should avoid relying solely on price competition and should strengthen enterprise risk screening during underwriting. He suggests promoting industry data sharing and implementing differentiated pricing based on corporate governance standards, in order to maintain long-term, steady and sound operations.

Wang Min added that given the current market’s lack of transparency in claims information, insurers should increase their attention to cases where listed companies are subject to regulatory investigations and cases where investors bring claims, especially listed companies that have already issued coverage announcements and are then investigated or sued. He also recommends working with professional insurance lawyers to carry out assessments of potential claims cases and manage claim handling for follow-up cases.

Looking ahead, Longge said he expects both the number of insured companies and the penetration rate to continue rising, and the gap with mature markets will gradually narrow. Market premium rates will gradually move out of the “price trough” and return rationally toward levels that reflect real risk. The coverage solutions under D&O insurance will become more differentiated—companies in different industries and of different sizes will have different terms and prices.

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责任编辑：Gao Jia

【Source: Securities Daily】