Lloyd’s insurers should develop products to cope with the sub-prime fall-out, Kiln chief executive Edward Creasy said this week.
Speaking at Lloyd’s, Creasy said the credit squeeze resulting from the crisis could lead to a lack of credit facilities for risk managers.
He added that Lloyd’s should provide the answer to this problem. “We ignore this new generation of risks at our peril,” said Creasy.
“We have a number of experts in the market to develop solutions to these problems. This will need a combination of input from all participants, be it brokers, underwriters, or clients.”
Creasy’s comments came as Swiss Re revealed a £523.5m pre-tax loss, directly related to the sub-prime crisis.
The reinsurer said falls in two of its clients’ investment portfolios, underwritten with credit default swaps insurance, also contributed to a 10% decline in the reinsurer’s share price.
SF300m (£131m) against its own portfolio, which is linked to mortgage-backed securities.
Standard & Poor’s said it would not take any negative ratings action at present.
