"Thus far we've seen over 20 shareholder lawsuits," said Michael White of Willis Group Holdings Ltd on Wednesday. "Insurers are looking at significant and costly litigation." Willis is the world's third largest insurance broker and White is an author of its report.
Studies by both Willis and broker Guy Carpenter, a unit of Marsh & McLennan Companies Inc. foresee losses to insurers of up to $3 billion, a serious but not fatal blow to the carriers who provide this coverage. Insurers currently write about $9 billion of D&O coverage annually.
The biggest insurers of company directors and officers are Travelers Companies Inc., American International Group Inc, Zurich Financial Services Group, Hartford Financial Services Group Inc., and Chubb Corp.
Hartford said its exposure to D&O was limited because it has written fewer policies in the financial services sector, which is taking most of the losses. AIG spokesman Chris Winans said that "at this point it's not a significant issue to us." The other insurers could not be reached for comment.