Willis publishes report on repercussions in the insurance market and beyond
D&O insurers and E&O insurers have seen a number of claims arising from the subprime issue, although it has been estimated that this is ‘just the tip of a huge iceberg,’ according to a new report.
Willis Group Holdings has released the report into the meltdown in the U.S. subprime mortgage marketplace.
The Willis alert gives background on the situation, an explanation of what went wrong, examines the impact on other outside industries, and reviews how the insurance marketplace has reacted.
The findings of Willisâ€™ report indicate the following:
A worst case loss scenario for Directors & Officers (D&O) insurers could be in the realm of $3 billion;
The downturn in the real estate market resulted in a 52 percent increase in the amount of title insurance claims paid in the second quarter of 2007 as compared to 2006;
Foreclosure activity in the first half of 2007 was up 55 percent from 2006;
Foreclosures for the month of July rose 93 percent from the prior July, and 115 percent from the prior August; and
Forty-three states have reported an increase in foreclosure activity in 2007.