Aon Benfield, a reinsurance intermediary and capital advisor, is predicting that direct insured losses resulting from the alleged Bernard Madoff Ponzi scheme could reach as high as $3.8 billion.
Madoff was arrested last month after allegedly confessing to fraud that involved paying early investors with money gained from subsequent investors.
"While the maximum potential exposed insurance limits are estimated to be more than $6 billion, the range of direct insured losses will be a far smaller number, most likely somewhere between $760 million and $3.8 billion, with a best estimate of $1.8 billion," said Stephen Mildenhall, head of Aon Benfield's actuarial and enterprise risk management practice, in a release. "These figures represent material costs, but are not likely to have a significant impact on the insurance industry."
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