Risks related to geopolitical tensions, cyber-attacks and artificial intelligence have emerged as new sources of liability claims against directors and officers, according to a report published by Allianz Commercial on Wednesday.
However, the U.S. financial products market is starting to show signs of stabilization overall, the insurer said.
Based on first-half activity, financial insurers expect the number of U.S. securities class action lawsuits to decline slightly from 229 last year to 216 in 2025, according to data from National Economic Research Associates cited in the report.
However, the severity of claims and settlement costs are increasing. Average payment value in the first half of 2025 rose 27% to $56 million. This compares to $44 million in inflation-adjusted payments in 2024, compared to an average of $38 million over the past nine years.
Global corporate bankruptcies, a key driver of D&O liability, especially in private companies, are expected to increase by 6% in 2025 and 5% next year, following a sharp increase last year, according to the report.
U.S. mega bankruptcies (filed by companies with more than $1 billion in reported assets) jumped to 17 in the first half of this year, the highest since the coronavirus pandemic, according to the report.
Cyber incidents such as ransomware attacks and service outages are a significant factor in the frequency of D&O claims. AI-related lawsuits are also rapidly increasing, with more than 50 cases filed in the past five years.
“In a challenging geopolitical and economic environment, D&O is under increasing scrutiny from shareholders and regulators,” Jarrod Schlesinger, global head of finance and cyber at Allianz Commercial, said in the report.
Despite the trends noted in the report, segments of the U.S. financial market such as private D&O remain highly competitive.
“While some insureds are in a better position to purchase additional limits in the current market, there has generally been little change in insurance purchasing behavior,” the report said.
