D&O claims set to soar for VW’s insurers
Following the scandal of the manipulated emissions data from Volkswagen the company’s directors and officers insurance is likely to take a hit. Reuters reports that insurance insiders believe that the automaker’s D&O policies will bear the brunt of the claims after the company’s CEO resigned Wednesday. The report suggests that a German firm of VW’s size would likely have in the region of $560 million of D&O cover spread across perhaps a dozen insurers. Claims are expected from shareholders as VW has lost 30 per cent of its value and policies will also be tapped for legal costs. Insurance lawyer Richard Leedham from London-based Mishcon de Reya told Reuters that costs of recalling vehicles would be unlikely to be covered by insurance due to the internal knowledge that led to the issue.
Waco Fire & Casualty no longer A.M. Best rated
A.M. Best has affirmed the financial strength rating of B+ and the issuer credit rating of “bbb-” of Waco Fire and Casualty Insurance Company, a Tennessee domiciled captive insurer. The outlook for both ratings has been affirmed at stable. Concurrently, A.M. Best has withdrawn these ratings upon management’s request to no longer participate in its interactive rating process.
British insurers pay out $117 million every day
The Association of British Insurers has released data that shows the country’s insurance firms pay out the equivalent of U$117 million every day. More than $12 million is to settle home and contents claims, although almost a quarter of UK homes do not have cover. Almost $14 million is paid out daily on life insurance policies despite just a quarter of lives being insured. Another $14 million is for commercial lines claims but the largest single amount is for auto insurance claims which cost insurers $41 million every single day.
Insurers combine for life sciences cover
Marsh and Munich Re have announced the availability of a new non-damage business interruption insurance (NDBI) solution that combines risk transfer and consulting services to assist life sciences companies in managing the impact of regulatory actions imposed by the US Food and Drug Administration (FDA).
“A regulatory action that ultimately leads to an enforced suspension of manufacturing and distribution can cost a life sciences company millions of dollars in remediation, reputational damage, and lost income,” said Doug Carey, Marsh’s US Life Sciences Practice leader. “With NDBA Pharma IQ, these companies now have a cost-effective way to better assess and measure these risks and lessen the financial impact of a regulatory action so they can more quickly return to normal operations.”
The FDA and its international counterparts are more closely scrutinizing life sciences companies today through planned and unplanned inspections to ensure current good manufacturing processes are being followed. When these inspections result in a suspension of manufacturing, whether voluntary or enforced, the resulting costs are not typically covered by traditional business interruption insurance policies since they are not the result of physical damage to the insured’s property.