Friday, 17 February 2012
Deutsche Bank D&O insurers likely to hold firm in Kirch case
Deutsche Bank’s D&O insurers will probably not be involved in financing the settlement agreed by the bank with Leo Kirch’s heirs, according to a leading expert. Mr Kirch, whose media group included the German TV channels Sat 1, ProSieben and N24, as well as pay TV channel Premiere, now Sky, died in July 2011. His heirs, wife Ruth and son Thomas Kirch, continued to fight Deutsche Bank and recently achieved an €800m settlement with the bank.
Leo Kirch
“I believe that the insurers will refuse to pay,” Michael Hendricks, a Düsseldorf-based insurance broker who specialises in D&O cover, said. The insurers have said from the outset of the case that they would refuse cover.
Deutsche Bank’s D&O policies have an insured sum of €500m, provided by at least six insurers including Zurich and Allianz. The claim stems from an interview the former Deutsche Bank head, Rolf Breuer, gave Bloomberg TV in 2002. He said that there were doubts as to Mr Kirch's creditworthiness.
Mr Kirch later asserted that his empire collapsed because of the damage caused by Breuer's statement. A long legal battle followed, which is now largely over.
According to insurance sources, Zurich is leading the talks with Deutsche Bank as head of the insurance consortium. The insurer has so far not informed the other insurance companies involved of the implications of the settlement. This is being taken as a sign that the insurers will not be involved in any settlement as they are normally included at an early stage when large settlements are being negotiated.
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Zurich and Deutsche Bank have close links. Deutsche Bank, for example, sells life insurance policies for the Swiss-based provider. Zurich was not prepared to comment.
According to insiders the insurers have argued that Mr Kirch was one of the bank's customers. When claims are raised under such circumstances professional indemnity insurance rather than D&O should respond, the insurers attest.
While Deutsche Bank had such a policy, ‘there will be hardly be anything left over from the insured sum,’ the broker, Mr Hendricks, said.
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