Even though, P/C Insurers not heavily exposed to sub-prime Residential Mortgage Securities (RMBS) there is going to be impact on insurer’s profitability on account of this. Currently sub-prime exposure equal to about 3% – 10% of policyholder surplus, Pure play sub-prime lenders typically purchase low limits of cover.
But exposures like lender’s liability coverage (an E&O exposure), D&O may see Class Actions against Mortgage Brokers and Lenders Based on allegations non-suitability and deceptive sales practices. This will have huge impact on commercial line insurers
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Even though, P/C Insurers not heavily exposed to sub-prime Residential Mortgage Securities (RMBS) there is going to be impact on insurer’s profitability on account of this. Currently sub-prime exposure equal to about 3% – 10% of policyholder surplus, Pure play sub-prime lenders typically purchase low limits of cover.
But exposures like lender’s liability coverage (an E&O exposure), D&O may see Class Actions against Mortgage Brokers and Lenders Based on allegations non-suitability and deceptive sales practices. This will have huge impact on commercial line insurers