What’s New: In Brief (January 29, 2008)

Losses in the directors and officers liability (D&O) portfolio due to the subprime crisis are expected to be in the neighbourhood of US$9 billion about triple what has been initially predicted, A.M. Best says in a report, citing equity analysts at Bear, Stearns & Co. Inc.As the effects of the credit crisis continue to ripple outward, class action suits will continue to come in over the next few months, A.M. Best’s BestWire says.Kevin LaCroix, a partner in OakBridge Insurance Services, told A.M. Best he has knowledge of 41 subprime-related class-action lawsuits filed thus far (32 involve potential D&O claims). The other nine suits are based on claims under the Employee Retirement Income Security Act, he added.A.M. Best quoted LaCroix as saying that beyond the potential losses from court awards or settlements, “the cost of defending these lawsuits could be potentially enormous.”

A warming global ocean influencing the winds that shear off the tops of developing storms could mean fewer Atlantic hurricanes making U.S. landfall, reports the National Oceanic and Atmospheric Administration (NOAA).Using data extending back to the mid-nineteenth century, NOAA climate scientists believe the warming of global sea surface temperatures is associated with a secular (a sustained, long-term increase) of vertical wind shear in the main development region for Atlantic hurricanes, a NOAA statements says.The increased vertical wind shear coincides with a downward trend in U.S. landfalling hurricanes, the researchers reported.In terms of hurricane strength, vertical wind shear though important is not the only factor affecting Atlantic hurricane activity, said Chunzai Wang, physical oceanographer and climate scientist at the NOAA. Other factors include atmospheric humidity, sea level pressure and sea surface temperature.