Fitch Report: Sub-Prime Crisis Will Result in Up to $4B in Liability Claims
According to a report released by Fitch Ratings on Wednesday, litigation stemming from the sub-prime mortgage crisis is estimated to result in $3 billion to $4 billion in directors and officers liability and errors and omissions claims.
Fitch also notes that “insurers’ potential losses could be substantially higher if credit issues spread to sectors not directly tied to the sub-prime mortgage market or if market conditions lead to increased bankruptcies.”
Fitch says it expects sub-prime investments’ poor performance to continue in 2008. “Further, highly illiquid, volatile market conditions have spread somewhat to other asset classes, which could impact insurers’ broader investment portfolio performance,” the report notes.
Published on April 10, 2008
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