NERA’s 2024 Full-Year Securities Trends Report: Key Insights for Insurance Professionals

Nera Report 2024 - Securities Claims and Securities Class Action

NERA’s 2024 Full-Year Securities Trends Report: Key Insights for Insurance Professionals

The 2024 Full-Year Securities Trends Report from NERA Economic Consulting is here, giving us a clear look at the latest trends in securities lawsuits. This report is packed with information that can help brokers, underwriters, and risk managers understand what’s happening in the world of securities claims and Directors and Officers (D&O) insurance. In this article, we’ll:

  • explain why this report is important
  • share key highlights, and
  • offer advice on how to make the most of it.

Why This Report Matters

The NERA report is often talked about in webinars, conferences, and industry events. It’s a go-to resource for professionals who deal with securities claims and litigation. If you’re a broker, this report can help you give better advice to your clients. If you’re a junior underwriter, your senior management team will be using this report to refine the company’s D&O insurance underwriting and pricing strategies.

Understanding trends like the rise in AI-related claims or the decline in crypto lawsuits isn’t just helpful—it’s essential. This report helps you stay informed about what risks are out there and how they could impact the companies you work with. By diving into these insights, you’ll be better prepared to handle challenges and offer valuable guidance to clients or stakeholders.


Highlights from the NERA Report

Acknowledging NERA Economic Consulting as the source, here are some of the most critical findings from the 2024 report:

  • “There were 229 new federal securities class action suits filed in 2024, matching the total number of filings seen in 2023.”
  • “Filings against companies in the technology and healthcare sectors combined accounted for more than half of all filings, and the Second and Ninth Circuits accounted for 61% of filings.”
  • “Of the 229 cases filed, 41% had an allegation related to missed earnings guidance while only 8% had an allegation related to merger-integration issues.”
  • “AI- and COVID-related claims increased in 2024. AI-related claims more than doubled relative to 2023, with 13 suits filed in 2024. Nineteen cases with COVID-related claims were filed, a 46% increase from 2023.”
  • “Crypto- and SPAC-related filings continue to decline, with only eight and nine suits filed in each category, respectively.”
  • “After a six-year decline, resolutions increased by 17% with 217 cases resolved, consisting of 124 dismissals and 93 settlements. The increase was mostly driven by an increase in the number of dismissed cases with Rule 10b-5, Section 11, and/or Section 12 claims.”
  • “Aggregate settlements totaled $3.8 billion in 2024, with the top 10 settlements accounting for approximately 60% of this amount.”
  • “The median Investor Losses were $1.76 billion, the highest recorded value over the past 10 years.”
  • “Aggregate plaintiffs’ attorneys’ fees and expenses totaled $1.06 billion, nearly $90 million more than the $974 million from 2023.”

This data highlights the steady volume of cases and notable shifts in focus, such as the rise in AI-related claims and the decline in crypto and SPAC filings.


Commentary and Analysis

Kevin LaCroix, in a recent article on The D&O Diary (read the full article here), notes the importance of these findings. He highlights that while the overall number of filings remained consistent, the data underscores shifts in the types of claims being filed and resolved. For example, the rise in AI-related cases reflects the increasing role of emerging technologies in securities litigation.

LaCroix also draws attention to the significant increase in aggregate settlements and plaintiffs’ attorneys’ fees, which signal a growing financial impact on defendants and insurers alike. This commentary further illustrates why understanding these trends is essential for professionals managing securities claims and D&O insurance portfolios.


How to Use the NERA Report

To make the most of the insights in the NERA Economic Consulting report, consider the following steps:

  1. Focus on Industry-Specific Data: Technology, healthcare, and sectors impacted by AI and COVID-related claims feature prominently in the report. If you work in these areas, prioritize those sections.
  2. Brush Up on Key Terms: The report’s technical language can be complex. Take the time to understand terms like Rule 10b-5 claims, Section 11 claims, and median investor losses.
  3. Leverage Expert Analysis: Resources like Kevin LaCroix’s D&O Diary provide valuable context and explanations of key cases and trends.
  4. Brush Up on Your D&O Knowledge: A deeper understanding of D&O insurance will help you connect the dots between the litigation trends highlighted in the NERA report and the risks directors and officers face. It also equips you with tools to explain how D&O insurance protects against securities claims. Take our Directors & Officers Liability Insurance 101 Course for a comprehensive foundation.

Takeaways

The NERA Economic Consulting 2024 Full-Year Securities Trends Report is more than just a compilation of statistics; it’s a roadmap for navigating securities litigation trends and their implications for the insurance industry. By engaging with this report, brokers, underwriters, and risk managers can position themselves as informed and proactive professionals, ready to tackle emerging challenges.

📥 Access the full report here: NERA Economic Consulting 2024 Full-Year Securities Trends Report

 

 

Explore a D&O course
Directors and Officers Liability Insurance
Popular
2 Hours

Directors & Officers Liability Insurance 101

$150.00
Take the course! Learn the fundamentals of D&O liability, indemnification, policy structure, claims and more.
Not for profit directors and officers liability insurance course
Popular
2 Hours

Not-for-profit Directors and Officers Liability Insurance

$150.00
Take the course! A valuable resource for every director and officer of a not-for-profit organization and those who support and guide them.