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Insurers writing D&O liability coverage are likely to see claims rise due to the current volatility in the stock market, according to a recent report by Standard & Poor's.
|Class-action lawsuit filings sparked by companies' investment losses are expected to rise in the coming months due to the credit crunch and subprime mortgage crisis. This could mean more losses for property-casualty insurers that write D&O coverage, as these insurers already are suffering from their own investment income losses.The S&P report stated that recent trends show more investor lawsuits are filed when stock market conditions worsen. For now, the rise in D&O coverage rates seems to be limited to banking and other financial institutions. The rates for financial institutions have increased 25 percent in 2008, while D&O rates for other sectors have remained stable.
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