Regulatory volatility continued to reshape underwriting strategies across D&O and EPLI markets, with wholesalers caught between mounting exposures and diminishing control over placement. For Anamae Saavedra (pictured), vice president at RLA Insurance Intermediaries, the core challenge wasn’t just market dynamics – it was the pace of regulatory scrutiny and how ill-prepared many placements remained.
“The biggest role that a wholesaler and anyone that places D&O, especially D&O, [has] is to be mindful [to] make sure you have regulatory coverage,” Saavedra said. “Because there are a lot of changes. We have to be mindful of them... If the government comes in and starts poking around, you need to make sure, even if it's a sublimit, that you have something to help these insureds.”
She pointed to privacy risks, immigration enforcement and the cannabis sector as particular flashpoints for EPLI policies. “IRCA has been around for a lot longer than I have,” she said, referencing the Immigration Reform and Control Act. “But it seems that in certain administrations, it becomes more prominent than in others. And certainly being mindful of that... even if it's defense only on this immigration defense... is also super important.”
While regulatory pressure has risen, market conditions have softened considerably – cutting into wholesalers’ ability to lead on coverage decisions. “The market is super soft. It's really soft. It's very challenging,” Saavedra said. “Just yesterday morning, I had a quote for 20 grand, and three hours later, I had someone else quoting at 10.”
That kind of price pressure, she argued, undermined the specialist role wholesalers are meant to play. “With a soft market, you have more of these direct markets that will go directly to the retailers,” she said. “Some of these people are just generalists. They're not focused in this arena.”
She cited missed coverage areas – like wage and hour exposure on EPLI – as a byproduct of transactional placement and commission-driven incentives. “I happen to write the E&O for several of my retailers,” she said. “When they have an E&O and an EPL risk, it's like, get left out, wage and hour coverage. If you had come to me instead of going for 15 points’ commission...”
For wholesalers, the concern is that insureds are increasingly underserved in pursuit of short-term incentives. “We're trying to do the best for the insured because ultimately that's who we care about,” Saavedra said. “But some of the coverages are lost.”
Litigation frequency also surged, especially in cyber, where social engineering claims have become the most common. “Probably the area where we're seeing most claims is on social engineering, on the cyber side,” she said. “There's still a lack of understanding of what a cyber liability policy can cover.”
Saavedra argued that coverage gaps often stem from client misconceptions – and agents failing to translate cyber risk in real terms. “It's not just, you know, I don't have a website. Well, it doesn't matter. It's your phone, it's your laptop, it's a file,” she said.
The risk, she noted, extended far beyond large enterprises. Her own father experienced identity theft, a situation she described as life-altering. “It's chaos in your life. Imagine a business,” she said. “Someone hacks in... they could just be sitting in there for months, watching what's going on. And you don't know. Until one day, they pop in and they destroy your life.”
Despite the clear spike in losses, she remained concerned that cyber was still under-prioritized. “These folks, these hackers, they know what they're doing. They're quite smart, if you ask me,” she said. “They do whatever they want, and they're getting away with it.”
Saavedra described herself as a generalist, but with deep experience in professional risks. “I write a lot of lawyers and title agents, quite a bit of title agents,” she said. “My background, I started out in the industry as a D&O underwriter. So I personally, I love public companies. I love the private companies.”
She challenged the assumption that private firms face minimal exposure. “Sometimes it's easy to just say, oh, well, who's going to sue me? Well, you're not thinking about your vendors, your competitors,” she said. “And once again, those regulatory inquiries that could come to you, even if you're a private company.”
She offered a similar warning for nonprofits, where reputational damage or financial mismanagement could drive litigation. “Could you be raising money and then those funds being used for something else? And someone asking, well, I went to this fundraiser, but nothing is coming out of this?” she said. “So there are certainly always areas where the best thing to do is protect yourself with that D&O policy.”
On the professional side, her advice was direct: “If you're providing services for a fee, get your coverage,” she said. “You're going to be in a better spot. You're going to sleep better at night.”
Asked about innovation in insurance, Saavedra didn’t turn to product launches or platform upgrades. Instead, she underscored situational awareness. “The most important thing that a broker can do... stay in tune with current events,” she said. “Some people don't see it, but it typically will trickle down into the insurance industry.”
Whether it’s natural disasters, geopolitical conflict, or pandemic fallout, she said those shocks often appear later in exclusionary language and litigation trends. “Covid came about... and all of a sudden we were getting Covid exclusions,” she said. “We need to be extremely mindful of what's happening around us in order to [do a] better job as professionals.”
