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Directors & Officers Modeling Evaluation ™ (DOME) Helps Public Companies Secure Adequate Coverage Limits
Arthur J. Gallagher & Co.'s proprietary statistical modeling tool supplements benchmarking analyses and historical loss reviews in predicting likely Directors & Officers Liability exposure

ITASCA, Ill., July 5, 2016 /PRNewswire/ -- Public companies face a critical business decision in determining how much Directors & Officers (D&O) liability coverage to purchase. In order to attract and maintain strong independent board members, companies need to secure adequate D&O coverage while keeping down costs.

Arthur J. Gallagher & Company's Directors & Officers Modeling Evaluation (DOME) Provides Clients with Best-in-Class D&O Risk Assessment

Most D&O risk assessments only involve surveying the insurance purchasing habits of major corporations and some also include a review of large past D&O claim losses. Global insurance broker Arthur J. Gallagher & Co. (NYSE: AJG) (Gallagher) offers clients a third, more accurate D&O risk evaluation method, which incorporates statistical modeling with benchmarking and claims reviews.

In a new report, Assessing D&O Risk for Publicly Traded Corporations, Gallagher's Management Liability Practice showcases the effectiveness of its proprietary D&O Modeling EvaluationTM (DOME), which it introduced in 1999.  For the past 17 years, Gallagher has continuously refined and tested DOME TM against other evaluation tools and actual client experience to enhance the tool's accuracy. Now it is offering a peek under the hood.

"To the potential detriment of directors and officers, assessing D&O risk through benchmarking alone can be flawed. Integrating DOME with traditional benchmarking and claims reviews increases the accuracy of D&O risk evaluations. This approach enables public companies to better protect their balance sheets and the personal net worth of their directors and officers," says the report's author, Dr. Phil Norton, who developed this unique risk management tool for Gallagher's Management Liability Practice and is vice chairman of the Midwest region for Arthur J. Gallagher & Co.

"When we recently retested DOME's accuracy, we took actual settlements and went back to see what loss costs our model would have predicted before those claims occurred," he noted. "The correlation between the model results and the actual claim values was approximately 90%, thus validating the effectiveness of the model."

"Our DOME model continues to be a true differentiator and one of our strongest tools in reducing our clients' total cost of risk," says Natalie Douglass, Esq., Senior Managing Director of Gallagher's Management Liability Practice. "It supports our ongoing objective of partnering with our clients to anticipate risk exposures and come up with the best solutions for their specific business needs."

Gallagher's Management Liability Practice developed DOME by collecting more than a decade of D&O losses, company exposures and trading statistics, and then creating its own proprietary models and algorithms, which rely wholly on client exposure data to project potential liabilities. Projections utilizing DOME's predictive methodology can be made well in advance of potential claims, thus increasing the likelihood that clients will have sufficient coverage limits in place if and when a claim arises.

The report also compares key components of DOME projections with independent results published in D&O studies released by Cornerstone Research and National Economic Research Associates (NERA) in 2016.

Assessing D&O Risk for Publicly Traded Corporations is available for free download on Gallagher's website at

Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, has operations in 32 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

Photo -

Anna Rozenich


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SOURCE Arthur J. Gallagher & Co.