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

By Our Reporter Yang Xiaohan

Recently, details on listed companies’ first-quarter Directors and Officers (D&O) liability insurance coverage plans were released. A reporter from The Securities Daily, based on data from the Eastmoney Choice database, found that in this year’s first quarter, nearly 100 listed companies had announced D&O coverage plans, and the proposed number of insured companies increased year over year.

Interviewed experts said that they expect the D&O insurance market to keep developing in the future, showing features such as a continuous rise in the number of insured companies and penetration rates, as well as differentiated coverage solutions.

The number of proposed insured companies increased year over year

D&O insurance is a type of coverage for listed company directors, supervisors, and senior executives (D&Os) when they are held liable for their duties due to work negligence or improper conduct. Under such circumstances, the insurance company 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, with the number increasing compared with the same period last year.

In response, Longge, vice director of the Innovation and Risk Management Research Center of the University of International Business and Economics, told a reporter from The Securities Daily that the growth in the number of insurance-buying companies in the first quarter was mainly driven by the combined effects of stricter law enforcement and actual case precedents. These factors have strengthened risk awareness among listed companies. At the same time, investors’ awareness of rights protection is also increasing, which is boosting the demand for companies to spread and share D&O duty performance risks through insurance.

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

Wang Min, who has more than ten years of experience in liability insurance work and is currently a senior adviser at Shanghai Jianwei Law Firm, told a reporter from The Securities Daily that since 2019, the Securities Law and the Company Law that were implemented successively have played a major role in driving the rapid increase in the penetration rate of D&O insurance in the A-share market. By the end of 2025, the number of listed companies continuously increasing their D&O insurance coverage plans further reflects both the widespread application of D&O insurance in the A-share market and a continuous rise in market recognition.

Coverage solutions will become more differentiated

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

“China Listed Company D&O Insurance Market Report (2026)” shows that since 2017, the simple average premium rate for A-share D&O insurance (calculated based on the premium budget and insured amount stated in listed companies’ announcements) has generally been on an upward trend—from 3 per mille in 2017 to 6 per mille in 2022. In 2023, the premium rate for D&O insurance turned at this point and showed a downward trend, and this trend continued throughout the 2025 fiscal year. By the fourth quarter of 2025, the simple average premium rate for D&O insurance was below 5 per mille.

Wang Min believes that this change is mainly because, in recent years, there have been more insurers underwriting D&O insurance, and the market’s underwriting capacity has grown rapidly. Meanwhile, D&O insurance claims reports have a reporting lag. The lack of transparency in market claims information leads to irrational competition, which causes premium rates to keep falling in the market.

However, D&O insurance pricing factors are relatively complex and are influenced by multiple factors. Wang Min reminds that in addition to market competition factors, insurers also need to comprehensively consider factors such as the insured company’s industry environment, stock price performance, administrative penalties, litigation risk, corporate governance, financial conditions, and the personal situations of directors, supervisors, and senior executives. As a result, the premium levels among different insured companies may differ significantly from the market’s average premium rate.

It is worth noting that because D&O insurance covers a fairly broad range of underwriting liabilities, the amounts involved in D&O insurance claims are often large. Data show that in the first three quarters of 2025, a total of 13 disclosed D&O insurance claims cases have been reported, with the total amount of claims paid reaching 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 potential future solvency risks that may be triggered by the current “low-price competition” in D&O insurance. In an environment where information is not transparent, insurers should avoid focusing solely on price competition, and strengthen corporate risk screening during underwriting. He suggests promoting industry data sharing and conducting differential pricing based on corporate governance levels to maintain long-term, steady operations.

Wang Min added that, under the current market environment where claims information is not transparent, insurers should increase their attention to cases in which listed companies are subject to regulatory investigations and are sued by investors for compensation—especially listed companies that were investigated or sued after they had released D&O insurance purchase announcements. He also suggests collaborating with professional insurance lawyers to properly assess potential claims and manage the subsequent claims settlement.

Looking ahead, Longge said that he expects the number of insured companies and penetration rates to keep increasing, and the gap with mature markets will gradually narrow. Market premium rates will gradually move out of the “price trough” and return to rational levels that reflect true risk. Coverage solutions for D&O insurance will become more differentiated, and the terms and prices enjoyed by companies in different industries and of different sizes will differ.