Advisen Survey: D&O, E&O Markets Not Materially Impacted by Sub-Prime

The crisis in the sub-prime mortgage market has had little impact on availability, cost or policy conditions of directors and officers liability (D&O) and errors and omissions liability (E&O) policies, according to a survey of financial sector risk managers and CFOs by Advisen Ltd., the leading provider of information and analytics to the commercial insurance industry.  
  
Based on responses from 110 insurance buyers – representing an impressive response rate of 15% – more than 90% of commercial banks, investment banks, mortgage lenders, real estate investment trusts and other companies in the financial services sector have renewed, or expect to renew, their D&O and E&O policies at the same or lower rates. This is despite more than $200 billion in write-downs reported to date from mortgage related investments and more than 175 lawsuits already filed against companies involved in the sub-prime mortgage market. More write-downs – and more lawsuits – are anticipated in the coming months.  
  
“We launched this survey when we didn’t detect a reaction to the sub-prime meltdown in the D&O and E&O insurance program data we routinely compile from insurance buyers and brokers,” said Dave Bradford, Advisen's chief insurance industry analyst. “We felt there had to be more to the story, but the survey results confirm our initial observations – all is quiet on the D&O and E&O fronts.”  
  
“Our informal discussions with brokers support the survey findings,” noted Tom Ruggieri, Advisen's CEO. “Brokers tell us that they may have to work hard, but they are getting tough risks placed with no change in rates or policy conditions. Programs with less sub-prime exposure are seeing significant rate decreases and broader coverage.”  
  
A detailed report on the survey results is available to full Advisen subscribers within the Advisen information platform. The report is available to non-subscribers for $250 by calling Advisen at 212.897.4800, or emailing support@advisen.com in the US, or +44 (0)20 7929 6929 or london@advisen.com in the UK.  
  
Advisen also will be releasing a comprehensive analysis of the potential impact of the sub-prime mortgage crisis on the insurance market, covering reported write-downs to-date, sub-prime-related lawsuits filed to-date, an analysis of potential losses to the insurance market, and estimated market share of the major writers of financial institution D&O and E&O. The report, which will be released Wednesday, February 6, will be available to Advisen subscribers for $200, and for $500 to non-subscribers.  
  
  
About Advisen  
  
Advisen Ltd. equals success for insurance professionals, driving growth and profitability through the broadest platform of analytics and information services. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry’s deepest data sets with proprietary analytics and applications that drive the risk and insurance lifecycle. Advisen is headquartered in New York with offices in London.