Confidential

Facts

Plaintiff Workmen's Auto Insurance Company appointed defendant Guy Carpenter & Company Inc. as its reinsurance broker.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that defendant acted negligently and breached the parties' reinsurance broker contract by committing various errors that resulted in plaintiff being forced to enter into a settlement with a reinsurer, PMA, for less than it was owed. The plaintiff further contended that defendant failed to inform plaintiff that PMA had concerns regarding interest credits, which later caused plaintiff financial disruption. The plaintiff also contended that the defendant committed various errors that resulted in plaintiff entering into two overlapping agreements, causing plaintiff to pay premiums twice.

Settlement Discussions

Defendant made a statutory settlement offer of $300,000, and the plaintiff made a statutory demand of $9,999,999.

Damages

Plaintiff asked the jury for $33.1 million, including: $8,300,000 for its compromised settlement with PMA; $24,500,000 for lost profits on new products; and $300,000 for overlapping coverage.

Result

The jury returned a verdict for the defense after two days of deliberation and a 13-day trial.

Other Information

FILING DATE: March 8, 2005.