(Updates shares in the fourth paragraph.)
Oct. 26 (Bloomberg) -- HCC Insurance Holdings Inc., the Houston-based insurer, fell in New York trading after saying costs were higher than forecast on policies protecting private- equity and hedge fund managers from liability claims.
The insurer will probably have to increase reserves by about $27.5 million for losses this year, HCC said late yesterday in a statement. The costs relate mostly to the financial products segment, which insures investment managers.
“We are understandably disappointed in the recent performance of our diversified financial products line of business,” Chief Executive Officer John Molbeck said in the statement. “This business has been adversely impacted by continued depressed economic conditions and unfavorable litigation expense trends.”
The insurer dropped 89 cents, or 3 percent, to $28.43 at 4:15 p.m. in New York Stock Exchange composite trading. The firm slipped about 1.8 percent this year, compared with the 3.5 percent decline of the Standard & Poor’s Midcap 400 Index.
HCC will review its pricing for the coverage, Molbeck said in the statement. The company also disclosed $34.6 million in pretax, third-quarter catastrophe losses and said it will report complete results Nov. 1.
--Editors: Dan Kraut, Dan Reichl
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