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European insurers may expect to see increasing legal defense costs as pressure mounts to allow more securities class actions and other forms of litigation that have proliferated in the United States, a reinsurer reported.

That warning came in the “Casualty Specialty Update” from the London office of Guy Carpenter & Company, LLC, which deals with international casualty insurance developments, including inflationary pressures on indexation clauses in liability reinsurance treaties and the effect of the subprime crisis on European casualty portfolios.

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