Contact:
David Bradford
Advisen Ltd.
212.897.4776
dbradford@advisen.com
Advisen Report Analyzes Impact of Subprime Meltdown on D&O and E&O Insurers
D&O insurers likely to suffer $3.6 billion in subprime-related losses
NEW YORK, N.Y., February 6, 2008 – More than $230 billion in writedowns from the subprime mortgage crisis have sparked a barrage of securities class action and related lawsuits that are likely cost to directors and officer liability (D&O) insurers $3.6 billion, according to a new report from Advisen Ltd., the leading provider of information and analytics to the commercial insurance industry.
“The Crisis in the Subprime Mortgage Market and Its Impact on D&O and E&O Insurers,” Advisen’s forthcoming report, provides details on writedowns reported by more than 120 financial institutions around the world and analysis of the 181 subprime-related lawsuits filed to-date. Based on historical securities class action settlement patterns and D&O program limits and retention data from Advisen’s Program Benchmarking database, Advisen forecasts D&O losses of about $3.6 billion, most of which will be borne by a small group of financial institution D&O insurers.
“As the subprime story unfolds, the potential impact on the insurance industry becomes clearer,” said Dave Bradford, Advisen's chief insurance industry analyst and the author of the report. “Losses to D&O and E&O insurers will be significant, but not cataclysmic.”
“The D&O and E&O program information we compile from risk managers and brokers provides Advisen unparalleled insight into this market,” noted Tom Ruggieri, Advisen's CEO. “That combined with our MSCAd large loss database and our comprehensive database of subprime-related writedowns gives us a firm basis for analyzing the impact of the subprime crisis on insurers”
Advisen’s report, “The Crisis in the Subprime Mortgage Market and Its Impact on D&O and E&O Insurers,” which will be released on Monday, February 11, draws from data sets not available to other industry analysts and provides insight into the factors that are driving D&O and E&O losses, including:
Details on the writedowns reported by more than 120 financial institutions across the globe,
Market cap losses experienced by those companies,
Subprime-related lawsuits filed against those companies,
An analysis of the full 181 subprime-related lawsuits,
Advisen’s forecast methodology for subprime D&O and E&O losses,
Market share of the top ten writers of financial institution D&O and E&O,
The contribution of subprime losses to 2007 and 2008 loss ratios, and
The impact of the subprime meltdown on D&O and E&O pricing based on program data reported by risk managers and brokers, and on the results of a survey of 110 financial institution insurance buyers.
“The Crisis in the Subprime Mortgage Market and Its Impact on D&O and E&O Insurers” is available to subscribers of the full Advisen information platform for $200, and to non-subscribers for $500 by calling Advisen at 212.897.4800, or emailing support@advisen.com in the US, or +44 (0)20 7929 6929 or london@advisen.com in the UK.
About Advisen
Advisen Ltd. equals success for insurance professionals, driving growth and profitability through the broadest platform of analytics and information services. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry’s deepest data sets with proprietary analytics and applications that drive the risk and insurance lifecycle. Advisen is headquartered in New York with offices in London. For more information, visit www.advisen.com or call 212.897.4800.
About Dave Bradford
Dave Bradford is a co-founder of Advisen and leads the Research and Editorial Department. He is Advisen's principal insurance industry analyst, and is the editor-in-chief of Advisen's various publications including the annual RIMS Benchmark Survey™, produced in partnership with the Risk and Insurance Management Society. Prior to founding Advisen in 2000, Dave spent 20 years in the reinsurance industry in underwriting, marketing and strategy development roles. Most recently, he was a Senior Vice President with Swiss Re where he led the Global & National Division of Swiss Re America, a $375 million profit center with a client base comprised of the 40 largest multi-national insurance groups.