DWF sees securities litigation offering insurers investment recovery opportunities
XLF•DWF says growing English securities litigation is increasing insurers’ exposure to defense costs and potential liabilities, while litigation may also help them recover investment losses caused by misleading disclosures.
1. Insurer exposure and recovery
DWF says growing English securities litigation is increasing insurers’ exposure to substantial defense costs and potential liabilities under directors and officers policies. It says insurers may also recover investment losses caused by misleading disclosures, with litigation funding making some claims more economically viable.
2. Claims and market activity
Listed insurers face securities claims over disclosures about reserve adequacy, capital management and regulatory compliance. DWF says greater institutional investor participation and expanding litigation funding are likely to drive a more active securities litigation market.
