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Article: Private equity risks emerge in sharper detail: more class-action lawsuits in the financial sector are expanding the risks to carriers in the business of underwriting directors' and officers' in the world of private equity. So far, insurers are still finding this market a worthwhile gamble.(SPECIAL REPORT: ALTERNATIVE RISK)
- Article from:
- Risk & Insurance
- Article date:
- May 1, 2008
- Author:
CopyrightCOPYRIGHT 2008 Axon Group. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Summary
* Historically, private-equity directors' and officers' insurance has been very profitable for insurers because their clients tend to be financially sophisticated with a high risk tolerance.
* More and more carders are getting involved in the market, according to experts.
* The increasing number of class-action lawsuits stemming from financial-sector volatility is a genuine cause for concern.
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Getting a grip on how profitable insuring private-equity companies is and how profitable that market is likely to be in the future is like trying to hop onto a moving train.