Subprime Class Actions Now Total 138

Property-casualty insurers have sustained relatively little damage despite a U.S. subprime mortgage market implosion that has wiped $173.2 billion off company balance sheets around the world, and insurance data firm said.

But Advisen, the latest firm to find insurers relatively immune from the subprime situation, did note the filing of securities class action suits and other types of suits that “may be covered by directors and officers liability (D&O) insurance policies and various types of errors and omissions (E&O) insurance policies.”

To date there have been 138 class actions, Advisen said. Among the lawsuits underway, Advisen said they include actions that have developed over insurance coverage disputes, underwriting malpractice, fraudulent trade practices, breach of contract, securities fraud and derivative shareholder actions.

The company said as of Jan. 8, 24 of the 112 companies have had one or more suits filed against them stemming from subprime-related losses or activities in the subprime mortgage market, the company found.

Advisen said commercial banks and investment banks have been the hardest hit by subprime losses with write-downs for Citigroup and UBS alone accounting for more than $28 billion.

Aside from bond insurers, and excluding Swiss Re's $1.06 billion loss from credit default swaps, the property-casualty insurance industry has emerged relatively unscathed: only about $2.2 billion in write-downs have been reported so far, of which $1.7 billion is attributable to AIG. Losses have been nearly evenly split between U.S. and non-U.S. companies, Advisen said.

The company, in addition to tracking the level of vaporized subprime assets, keeps a continuing tally of subprime related lawsuits.

Examining the write-downs, Advisen said they represent only a small percentage of the total subprime exposure of the companies involved. The 112 companies identified by Advisen as experiencing write-downs have reported subprime-related assets of $440 billion.

However, Advisen said, not all of the companies have reported their total exposure to total collateralized debt obligations and other subprime-related investments. Advisen estimates the 112 companies could have as much as $1.2 trillion of subprime-related assets (pre-write-down) on their balance sheets.

Advisen said it is logging details of write-downs to date, as well as related lawsuits, which will be regularly updated and posted in Advisen.

More information is accessible online at www.advisen.com or by calling 212.897.4800.