Towers Perrin Releases 2008 D&O Survey Report: Some Comments

Towers Perrin Releases 2008 D&O Survey Report: Some Comments - 9/10/2009

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Towers Perrin Releases 2008 D&O Survey Report: Some Comments
Kevin LaCroix

The D & O Diary. September 10, 2009
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EXCERPT: On September 9, 2009, Towers Perrin released its report of the firm’s 2008 Survey of Directors and Officers Liability Insurance Purchasing Trends, which can be accessed here. Towers Perrin’s anticipated annual report again this year will undoubtedly be widely read throughout the D&O insurance industry. The report is a good resource and it is full of useful and interesting information. […] the most significant limitation is one that is duly noted in the final two sentences of the Report section headed "Statistical Terms Used in This Report." As the Report states, the Report is the product of a survey, which means that the data in the Report are drawn from a "non-probability sample." That is, participants "choose – or are selected" to participate, and therefore the sample "is not random." Most importantly, because "not all potential respondents are likely to participate, survey biases must be considered when interpreting results." It is the danger that this last point – the possibility that the reported results reflect "survey biases" – that most concerns me. In particular, the reference to the possibility that the survey respondents were "selected" is particularly relevant. Specifically, the broker rankings section of the Report reveals that fully 95.2% of all survey responses came from the clients of just four brokerage firms. The same four firms also dominated the 2007 survey results, but the 2008 results reflect an even greater concentration, as the four firm’s clients represented "only " 88% of the survey respondents in the 2007 survey. In the 2008 survey, only 4.8% of all respondents are clients of firms other than the four brokerages. Indeed, clients of the three global insurance carriers represented just 1.8% of the respondents.

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