Aon Corp. estimates that the insurance industry’s range of direct insured losses will likely be between $760 million and $3.8 billion from Bernard Madoff’s alleged Ponzi scheme, with a maximum exposure of a massive $6 billion. Aon stated in a report issued yesterday that the most likely loss will be $1.8 billion, according to Medill Reports.
Aon estimates that in the unlikely event that there is 100 percent liability for all parties, the insurance loss will total $6.44 billion. The study was based on the assumption that litigation stemming from the Madoff scandal will be a source of inevitable claims against insurance companies who write directors and officers, errors and omissions and fidelity coverages.
Based on its assessment of possible litigation outcomes, Aon estimates insurance losses of $371 million to asset management firms, $1.46 billion to foreign banks and insurers, and $6.2 million to charities, for a total of $1.84 billion, according to the Medill Reports article.