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Analysis: Estimate of liability losses from financial crisis rises to $9.6bn

06 November 2008

A number of insurance firms are set to be "clobbered" by directors' and officers' liability (D&O) and errors and omissions (E&O) pay-outs, with losses related to the financial crisis potentially reaching $9.6bn.

Read more: D&O E&O liability insurance advisen

A number of insurance firms are set to be "clobbered" by directors' and officers' liability (D&O) and errors and omissions (E&O) pay-outs, with losses related to the financial crisis potentially reaching $9.6bn, according to David Bradford, executive vice-president of Advisen.

Advisen and ratings agency Standard & Poor's (S&P) this week published reports warning that the subprime mortgage meltdown and the global financial crisis will spark a large rise in such liability insurance losses as the number of legal cases goes up.

In February, Advisen forecast $3.6bn of insured D&O losses but it has revised its outlook and increased that figure to $5.9bn because of an increase in securities class action suits,...


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Poll

Catastrophe bond issuance was $4.3bn in 2011. How much new issuance will there be in 2012?

Less than $3bn
0%
$3bn-$4bn
36%
$4bn-$5bn
27%
$5bn-$6bn
9%
$6bn-$7bn
18%
More than $7bn
9%

Quote

If last year was the year of the cat, then this year could be the year of the debt crisis.

Mike Van Slooten, head of international market analysis at Aon Benfield