Risks for Directors and Officers

Top seven risks for Directors & Officers

Q: How important are the following risks for the Directors & Officers of your organisation (whether financially or reputationally)?
Note: Ranked based on ‘very important’ or ‘extremely important’ for each risk. *Against your organisation. **Including threat of fines and penalties.

Top seven risks for Directors & Officers

It seems surprising that geo-political risks have only now found their way into the top seven risks for Directors and Officers. The D&O underwriting and broking community have been openly discussing these challenges for the last few years. Could it be that the narrative is now being heard or is this driven by the further shifts in the world over the last 12 months? Client’s need to be aware of what Geo-Political risks means to their own business as whilst there is consistency on a broader scale, there will always to be nuances on their impact to each company.

Martin Stewart, Underwriter
HDI Global

The first appearance of geo-political risks s in the top seven risks emphasises the heightened focus of boards of directors on global instability and the need to balance this with a desire for continued growth and profitability. For D&O underwriters, understanding how these evolving concerns affect our clients’ operations remains a key priority alongside assessing the governance frameworks and risk management controls implemented in response.

William Thoms, Underwriter
AWAC

Risks for Directors and Officers

By revenue

Cyber and data risk continues to be a topic our D&O underwrites discuss in detail with out clients, with cyber incidents regularly in the headlines organisations of all sizes are increasingly focused on their exposure to these risks. This heightened scrutiny is also driving a rise in related shareholder and regulatory actions against directors, particularly where there are perceived deficiencies in oversight, preparedness, or incident response.

Emma Pereira, Undewriter
Beazley

Top seven risks for Directors & Officers

By region

Top seven risks for Directors & Officers

By industry

Q: How important are the following risks for the directors and officers of your organisation (whether financially or reputationally)?
Note: Ranked based on ‘very important’ or ‘extremely important’ for each risk. *Against your organisation. **Including threat of fines and penalties

Top seven risks for Directors & Officers

By industry

Unsurprisingly given the speed of implementation of advanced technologies across the financial institutions (FI) sector and recent high profile media coverage, cyber attacks (including extortion), data loss, systems/control failures and regulatory breaches remain the top risks facing directors. This would also support the change upwards by 9 places in ranking of artificial intelligence (AI) risks when compared to the survey results in 2025. It is worth noting that AI is now a top 5 risk for directors of banking institutions. Other main movers from last year is the introduction of corporate crime/failure to prevent is now a top 5 risk for FIs whilst breach of sanctions has fallen slightly down the rankings. Health and safety remains a concern whilst diversity/equality/inclusion and climate change have reduced in the priority of risk rankings faced by boards.
Overall the survey results shows that directors of FIs are well aware of the challenges of identifying emerging risks when it comes to implementing technology/using AI and the repercussions of failing to do. Like with all risks, the time and focus of directors on how to adequately deal with them will be judged with the benefit of hindsight. Watch this space for next year’s survey to see how the risks facing directors of FIs evolves.

Henry Keville, Head of GB Financial Institutions
Global FINEX

Sample: Left hand side: All survey participants. Right hand side: Only those who answered that A.I. risk is at least important for the D&Os of their organisations.
Note: Don’t know was excluded.

AI risk

What is it about AI which most concerns you?

Consider the AI risk as
‘very important’ or ‘extremely
important’ for the Directors & Officers of their organisation

AI risk

What is it about AI which most concerns you?

Artificial intelligence is on firmly on the radar of both insurers and insureds. AI related securities claims accounted for approximately 8% of all US filings in 2025, with allegations typically focusing on overstatement of capabilities, inadequate risk controls, or insufficient readiness. For insurers, it is critical to assess not only how AI is deployed, but also the robustness of governance frameworks, risk management processes, and board-level oversight surrounding its use.

Emma Pereira, Underwriter
Beazley

The relatively low ranking of misrepresentation of AI capabilities is noteworthy given recent D&O litigation trends. For example, in the US, AI-related disclosures have become a leading driver of event-driven securities class actions, with allegations typically focusing on misrepresentation of capabilities, revenue attribution, or inadequate disclosure of associated risks.While initial cases of AI related D&O litigation primarily involved technology companies, we are now observing a broader trend across healthcare and life sciences, financial services, consumer sectors and industrial companies. Increased regulatory scrutiny is likely to sustain and potentially accelerate this litigation trend.

Luca Ravazzolo, Underwriter
Zurich Insurance Company Ltd

Sample: Left hand side: All survey participants. Right hand side: Only those who answered that A.I. risk is at least important for the D&Os of their organisations.
Note: Don’t know was excluded.

Operational resilience

Which aspect of operational resilience concerns you most?

Considered operational resilience
as being within top five of more time needed or materiality to business

Operational resilience

Which aspect of operational resilience concerns you most?

New regulatory regimes such as DORA (digital operational resilience act), CSRD (Corp sustainability reporting directive) are putting more pressure on directors. These frameworks are driving a more controls-based approach on director accountability, elevating the risk exposure for board members. As a result, operational resilience, data integrity, and reporting accuracy are becoming more prominent areas of concern for insureds.

Emma Pereira, Underwriter
Beazley

Operational risk and resilience professionals are increasingly stretched, required to respond simultaneously to a growing number of emerging and familiar crises. This rising complexity is accelerating the shift from reactive risk management to proactive resilience.We emphasise the need for a comprehensive perspective, combined with a disciplined approach to prioritising the actions that most materially strengthen resilience.

Alexandra Cosma, Director of Operational Risk Solutions, Global FINEX

Skills and knowledge of the board

To what extent do you agree that your fellow board directors have the necessary skills and knowledge to provide effective oversight of the each of the below areas?

Note: Percentages indicate ‘agree’ or ‘strongly agree’.