Explaining the D&O soft market

Today Advisen carried an excellent summary by Business Insurance on the frequency of class action suits in 2007.

While the number of filings increased in the 2nd half of 2007, "the frequency of filings last year was 14.4% below the 194 lawsuits filed yearly on average from 1997 through 2006," according to their sources.

The question to be answered is whether the increase in frequency in the past 6 months is a change in trend or whether frequency will revert to the mean.

Comparing class action frequency with D&O rates will show a high correlation.