A quiet start to the first quarter of 2021, but too soon to speculate on class action numbers against foreign filers for the rest of the year
Over the last decade, and specifically in the last five years, the annual number of Securities Class Actions (SCA’s) against non U.S. companies significantly increased and remains at a consistently high level. AIG’s latest quarterly SCA bulletin for Q1 2021 shows a relatively quiet quarter with 7 core SCAs against non U..S. companies. While this shows a drop from Q12020’s figures of 13 foreign filers, it is far too early to speculate on what might happen to overall numbers for this year. As signposted in our FY 2020 bulletin, we think shareholder derivative lawsuits against foreign filers and SPAC related actions are worth paying close attention to over the course of this year.
The D&O insurance market for non-US issuers has undergone significant changes and retraction in the past 24-36 months with a lack of insurers who are willing to provide D&O capacity despite a steep rise in demand resulting in tougher market conditions. The hardening insurance market is making it more expensive and more difficult to secure D&O coverage.
AIG’s underwriting teams are available and eager to discuss insured’s D&O needs with their brokers. Our claims team has significant experience assisting clients in the defence and settlement of securities class actions, providing helpful insight and support when directors and officers need it most.
At AIG, our strong claims expertise means we will not only offer specialist help when a claim occurs, but will also assist in mitigating potential claims in the first place.