Directors' and Officers' Insurance Costs Skyrocket for Financial Institutions
02 Marzo 2009 - 5:47PM
PR Newswire (US)
Aon study finds year-over-year price increases for the first time
in over five years CHICAGO, March 2 /PRNewswire-FirstCall/ --
Directors' and officers' liability insurance costs for the S&P
Financials Sector increased 50 percent in the fourth quarter of
2008 compared to that of 2007 according to the Quarterly D&O
Pricing Index released today by Aon Corporation's (NYSE:AOC)
Financial Services Group. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO) Aon
experts believe that a number of unprecedented events contributed
to these significant price increases, including: -- The Department
of Labor reported that 1.3 million jobs were lost from Oct. - Dec.
2008 -- Bernard L. Madoff was arrested and charged with securities
fraud after it was revealed that his securities business was
allegedly a Ponzi scheme resulting in investment losses estimated
at $50 billion and affecting as many as three million investors --
The Dow Jones Industrial Average, S&P 500 Index, S&P
Financials Sector Index and the NASDAQ Composite Index all closed
down significantly for the year -- Stanford Law School's Securities
Class Action Clearinghouse announced that 225 federal securities
class-action lawsuits were filed in 2008 The Index shows that the
average price for $1 million in coverage limits increased 3.15
percent from Q4 2008 compared to Q4 2007. This is the first time in
21 consecutive quarters that prices have increased year over year
and the first time since 2003 that price increases in the financial
sector have been significant enough to move the entire Index. "In
the short term, we expect to see D&O pricing for the financial
sector continue to rise," said Mike Rice, managing director of
Aon's Financial Services Group and an author of the Quarterly
D&O Pricing Index. "It is possible, however, that a tough
underwriting environment could emerge for all public companies as
the economy continues to negatively impact both financial results
and stock prices." Aon's analysis found that rates for D&O
liability insurance in non-financial sectors actually declined by
6.3 percent in Q4 2008 compared to Q4 2007. The Quarterly D&O
Pricing Index is designed as a hands-on tool to provide the
directors, officers and risk managers of publicly traded
corporations with a better understanding of current and historic
pricing conditions for directors' and officers' liability
insurance. About Aon Aon Corporation (NYSE:AOC) is the leading
global provider of risk management services, insurance and
reinsurance brokerage, and human capital consulting. Through its
more than 37,000 colleagues worldwide, Aon readily delivers
distinctive client value via innovative and effective risk
management and workforce productivity solutions. Aon's
industry-leading global resources and technical expertise are
delivered locally through more than 500 offices in more than 120
countries. Named the world's best broker by Euromoney magazine's
2008 Insurance Survey, Aon also ranked highest on Business
Insurance's listing of the world's largest insurance brokers based
on commercial retail, wholesale, reinsurance and personal lines
brokerage revenues in 2008. A.M. Best deemed Aon the number one
insurance broker based on brokerage revenues in 2007 and 2008, and
Aon was voted best insurance intermediary, best reinsurance
intermediary and best employee benefits consulting firm in 2007 and
2008 by the readers of Business Insurance. For more information on
Aon, log onto http://www.aon.com/. Media Contact Cybil Rose
312.755.3537
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT:
Cybil Rose, +1-312-755-3537, , for Aon Corporation Web Site:
http://www.aon.com/
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