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D&O Insurer Challenges Amid Market, Economic Turbulence By Nessim Mezrahi and Stephen Sigrist (October 11, 2022, 3:17 PM EDT)
The slip from record market capitalizations for U.S.-listed companies during the second quarter, compounded by high litigation exposure and potential claim severity of private Rule 10b-5 securities class actions, leaves insurance carriers and issuers facing a post-pandemic economic contraction as corporate America grapples with the arduous institutionalization of environmental, social and governance amid a new Cold War.[1] During the four-year period between the third quarter of 2018 and the third quarter of 2022, the aggregate market capitalization of U.S.-listed companies increased 26.6%, from $31.6 trillion in the third quarter of 2018 to $40 trillion in the third quarter of 2022 — after peaking at $51.9 trillion in the first quarter of 2022.[2]
Nessim Mezrahi
Our data and analyses indicate that litigation exposure and potential securities class action severity on 596 consolidated securities claims filed after the third quarter of 2018 that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, also peaked in the first quarter of 2022.[3]
Stephen Sigrist