Subprime insurance lawsuits reach $3 billlion

NEW YORK – The number of lawsuits filed against firms and individuals in the wake of the credit crisis is leading to huge losses for insurance companies. Property casualty managers providing cover for directors and officers from mortgage lenders and investment banks have reported billion-dollar writedowns since the onset of the summer's subprime crisis.

Studies by Willis Group Holdings and Guy Carpenter brokers suggest losses of around $3 billion – a wounding but not fatal blow to insurers who currently pay out costs of around $9 billion per year in directors and officers (D&O) coverage claims.

The losses to insurers are likely to be exacerbated by litigation filed not just by lenders but by the large banks that securitised their lending and have since recorded the largest losses since the summer.

Insurance industry sources had said in September they expected an acceptable subprime exposure.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here