In looking at the developing litigation database around subprime, Advisen tracks ‘clash’ cases, also called ‘related cases’ in a number of ways.
First, the classic related case, a single complaint that names multiple parties. In these cases, especially securities class actions, a company is sued and the complaint also names the auditors and/or lawyers for any malpractice and possibly underwriters related to any public debt offerings.
Advisen categorizes these cases by party and allegations made against that entity. A company is entered under Securities, the auditors/lawyers/underwriters are entered under Professional Practices. Losses are associated with the party that actual paid it, making it simpler to calculate D&O losses from E&O losses.
For the Subprime/Credit Crisis, we have 30 related cases as of April 28:
Related ID: 7561 Calamos Global Dynamic Fund 2008
Related ID: 7201 Deutsche Bank 2008
Related ID: 7182 Bank of America 2008
Related ID: 7181 Huntington Bancshares 2007-2008
Related ID: 7061 HSH Nordbank - UBS 2008
Related ID: 7041 Centerline 2007-2008
Related ID: 6982 Nomura 2008
Related ID: 6962 MBIA 2008
Related ID: 6961 Ambac Financial 2008
Related ID: 6941 National City 2008
Related ID: 6862 Morgan Stanley 2007-08
Related ID: 6841 Teletech 2008
Related ID: 6802 Tarragon 2007
Related ID: 6801 Impac Mortgage 2007
Related ID: 6781 E*Trade Financial 2007
Related ID: 6742 Luminent Mortgage 2007
Related ID: 6741 New Century Financial 2007
Related ID: 6321 Bear Stearns 2007 - 2008
Related ID: 6241 Sagittarius CDO 2007
Related ID: 6222 Thornburg Mortgage 2007
Related ID: 6181 UBS 2007
Related ID: 6003 Homebanc 2007
Related ID: 5981 Regions Morgan Keegan Select Bond Funds 2007
Related ID: 5661 Citigroup 2007
Related ID: 5603 Washington Mutual 2007
Related ID: 5283 Hovnanian 2007
Related ID: 5163 Beazer Homes 2007
Related ID: 5162 Countrywide Financial Corp 2007
Related ID: 5161 Fremont General Corp 2007
Related ID: 5021 American Home Mortgage 2007
Second, Advisen tracks cases that have a common initial trigger. Examples of this are Enron, the In Re: IPO cases and the Subprime and Credit Crisis cases.
Subprime & Credit Crisis: Related Case ID 4000 – Total Cases to date: 280; Losses to date: $87,156,390.
Clash cases that are sub-types to the Credit Crisis:
Related ID: 7503 Student Loans - Credit Crisis 2008 - Various cases as secondary to Subprime
Related ID: 7123 Credit Default Swaps 2008 - CDS failures re subprime crisis
Related ID: 7202 Auction Rate Securities 2006 - 2008 - Cases related to ARS, sales practices and credit crunch
Third, we track cases by type of remarkable risk. These types of cases filed by different parties and governmental entities around specific allegations. For example: anti-trust and price-fixing charges, market timing violations and the Foreign Corrupt Practices Act.
The example of this for Subprime/Credit Crisis cases is:
Related ID: 5923 Predatory Lending - Investigations from Mortgage Crisis
Subprime and credit crisis litigation is so pervasive that we now have to track the various strains of it.
Tuesday, 29 April 2008
Monday, 28 April 2008
Benefits of ECF
This month's Market Reform newsletter (here) offers a very good article by executives at Lockton detailing how use of ECF has allowed a higher degree of focus and execution on the complex tasks of broking claims while reducing the unnecessary overhead of handling routine claims matters. Here are some of my favorite quotes:
You can put together a package of, say, six claims, totalling no more than
€1000 in a matter of minutes. Previously these would have taken hours to walk
round the market.
The MI reports that the in house workflow system is now capable of producing
allow for a much more proactive approach to the working day....(which) allows us
to start to measure each stage of the process. This in turn means we can start
to set target turnaround times for each stage and flag up where these aren’t
met. This means that we can manage by exception and not just progress work in
strict order.
(Before ECF) claims staff were constrained by the hours that underwriters
were open to accept files
What brokers do and how they get paid
How do buyers of commercial insurance work with their brokers now? Since the Spitzer investigations rocked Marsh and others in the industry, have things changed? How has the fierce soft market impacted the way brokers are paid? Advisen and RIMS wanted to find out.
Today is the first day of the annual RIMS Conference and we announce the results of the Advisen / RIMS Broker Services and Remuneration Study — based on data gathered in February from 1,519 participants — which has found that insurance buyers are driving brokers to change their service offerings and the way brokers are compensated.
The results are part of the 2008 RIMS Benchmark Survey™ book available here.
While virtually all survey respondents continue to use brokers to place insurance programs, the majority agree that brokers are shifting from commissions to fee-based compensation. With this shift towards fee-based pricing, respondents note a broker trend towards supplementing dwindling commission income with added services.
It's an incredible tool for buyers to benchmark the value for money received from their brokers and for management at brokerage firms to benchmark the level of services they offer as compared to their competition.
Today is the first day of the annual RIMS Conference and we announce the results of the Advisen / RIMS Broker Services and Remuneration Study — based on data gathered in February from 1,519 participants — which has found that insurance buyers are driving brokers to change their service offerings and the way brokers are compensated.
The results are part of the 2008 RIMS Benchmark Survey™ book available here.
While virtually all survey respondents continue to use brokers to place insurance programs, the majority agree that brokers are shifting from commissions to fee-based compensation. With this shift towards fee-based pricing, respondents note a broker trend towards supplementing dwindling commission income with added services.
It's an incredible tool for buyers to benchmark the value for money received from their brokers and for management at brokerage firms to benchmark the level of services they offer as compared to their competition.
Wednesday, 23 April 2008
The other half of return
Insurance companies make their earnings from underwriting profit and investment profit on the premiums collected. I haven't really covered that angle to date.
While the big story has been the bond insurer subsidiary (SCA), and subprime exposure, yesterday's XL's earnings announcement (here) talks about the hit from investment return.
The Finance Director of Lloyd's gave some comments to assure the markets that the Lloyd's Central Fund is well tended to - see coverage here.
The subprime bodies are buried in both areas and upcoming earnings announcements will show further evidence of what we at Advisen are seeing, an end to the soft market in one important market sector (Directors & Officers and Errors & Omissions insurance for Financial Institutions), although the imbalance of supply and demand is too great to change the overall market dynamic. For more on the topic, click here.
While the big story has been the bond insurer subsidiary (SCA), and subprime exposure, yesterday's XL's earnings announcement (here) talks about the hit from investment return.
The Finance Director of Lloyd's gave some comments to assure the markets that the Lloyd's Central Fund is well tended to - see coverage here.
The subprime bodies are buried in both areas and upcoming earnings announcements will show further evidence of what we at Advisen are seeing, an end to the soft market in one important market sector (Directors & Officers and Errors & Omissions insurance for Financial Institutions), although the imbalance of supply and demand is too great to change the overall market dynamic. For more on the topic, click here.
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