An insurance analyst from Bear Stearns has tripled his prior estimate of potential losses to liability insurers stemming from the credit crisis–raising a $3 billion guess he published in September to $8-to-$9 billion.
In a research report published Friday, David Small of Bear Stearns in New York repeated the same methodology he used in his prior report to estimate a "potential worst-case scenario" of directors and officers and professional liability losses for the insurance industry arising from the subprime crisis.
But with the starting point of his analysis–the number of financial institutions and related companies that lost more than 40 percent of their market capitalization in 2007–soaring to 154 from only 55 in his original analysis, the insurance loss estimate has ballooned also.
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