Howard Sider, vice president and REIT national practice at Arch Insurance Group, and Stephen Kelly, account executive at Alliant, participated in a video interview during REITwise 2022: Nareit's Law, Accounting & Finance Conference held in Orlando, Florida on March 23-25.
Sider and Kelly offered insights into insurance trends and the Nareit Directors & Officers (D&O) Program.
Sider commented on key litigation trends in the public D&O market. He noted that coming into 2021, the industry was coming out of a four year period of significantly elevated securities class action activity with average annual filings nearly double the prior four year period. In 2021, there was a pretty significant decrease, closer to historical norms, he noted.
As to the REIT industry specifically, claims have been “pretty stable” over the past couple years, while severity for security class action settlements has remained fairly high.
Other topics on the radar include shareholder derivative demand letters, focused on compliance with executive compensation plans, merger objection lawsuits on most M&A deals, and heighted activist activity, which can increase the risk for claims, Sider said.