Insurers should expect to face claims from lawsuits relating to the Libor scandal that cost Barclays Plc (BARC) 290 million pounds ($455 million) in fines, according to Jardine Lloyd Thompson Group Plc. (JLT)
“It’s certainly a potential event,” Dominic Burke, chief executive officer of London-based JLT, said in a telephone interview today. “If suits are upheld against a bank then claimants will seek to be compensated from its assets. Those assets are usually insured.”
Corporations including banks typically buy directors and officers insurance which pays out if executives are held personally liable for negligence, accidents or market abuses. While these policies are common, they often stipulate that they will only pay a specified maximum to shield insurers against spiraling costs, Burke said.
“D&O will have some exposure,” Burke said. “But an awful lot of water has to go under the bridge before we get any clarity on how much this will cost.”
Barclays, the U.K.’s second-largest bank, is among more than a dozen lenders named in lawsuits relating to the alleged manipulation of the London interbank offered rate, the benchmark for $500 trillion of securities. Regulators around the world are investigating the potential rigging of other interbank rates such Euribor.
JLT, the U.K.’s biggest publicly traded insurance broker, said pretax profit climbed 11 percent to 85.1 million pounds ($133 million) in the first half of the year due to higher growth in Asia and Latin America. That beat the 81.1 million- pound estimate of three analysts compiled by the company.
The stock climbed 0.4 percent to 726 pence at 8:19 a.m. in London trading, valuing the company at about 1.6 billion pounds.
To contact the reporter on this story: Kevin Crowley in London at firstname.lastname@example.org
To contact the editor responsible for this story: Edward Evans at email@example.com;