Posted on 09 Feb 2009
Nearly 90 percent of attendees at a recent Financial Lines seminar held by Willis Group Holdings, the global insurance broker, believe the current economic climate has increased the risk of litigation against financial institutions.
The seminar, titled "Credit Crunch Fallout: The Effect on Insurance Risks for Financial Institutions," was a joint presentation by Willis and law firm K&L Gates to their financial institutions clients. Held at The Willis Building in Lime Street, London, the event was attended by company secretaries, finance directors, risk managers and insurance buyers from 40 financial institutions.
Commenting on the survey's findings, Duncan Holmes, Executive Director of FINEX and co-head of the Willis' Financial Institutions team said, "This survey clearly shows that senior officials of financial institutions are concerned about growing exposure to lawsuits, and the significant trend of increasing claims frequency and severity. The findings also highlight the fact that policy wordings will need to be reviewed and limits of indemnity checked for adequacy."
*Of the 108 participants who took part in the survey, 87 percent said they felt more vulnerable to litigation in the current economic climate. Other findings in the survey included:
*35 percent of participants believe that their companies have an exposure to claims and investigations in the US.
*52 percent have accepted that Financial Lines insurance premiums will increase at their next
*64 percent had recently completed a review of their chains of communication in order to avoid delays in notifying claims.
*68 percent of delegates claimed that a review of insurers or broker relationships in the coming year is likely to occur.
Speaking for K&L Gates were Alan Berkeley, Jane Harte-Lovelace and Sarah Turpin, who presented an overview of current claims, litigation trends and regulatory risks faced by financial institutions in North America and the UK, and gave tips for maximising insurance cover.
Duncan Holmes from Willis then shared experiences from the financial lines insurance market with lessons learnt from fourth quarter renewals, the reinsurance renewal season and insurers' financial results, and discussed the ramifications for the market in 2009.
Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 20,000 Associates serving clients in some 190 countries.