Reinsurance News’ Post

What is going on with insurance liability claims costs? Some insights here from SwissRe that are quite useful. SwissRe defines the term social inflation "as the increased severity of insurance claims beyond that which can be explained by economic drivers." This study reports: > Prior episodes of social inflation in the US in the 1980s and 2000s were driven by material changes to tort law and an expansion of access to mass tort. > The current episode starting in the mid-2010s has been characterised by a rising frequency of large single-claimant events, with associated outsized court verdicts centred around personal injury cases. > Over the five years to 2022, countries like the UK and Australia have seen double-digit growth in liability claims, also in excess of economic inflation. > For Australia and Canada, the contribution was 7 ppts. To date, social inflation pressures in Germany and Japan have been minimal. The report concludes amongst other things that "After the US, of our sample countries Canada, the UK and Australia, which also have common-law systems, will likely be most exposed to social inflation." SwissRe report here: https://lnkd.in/d4z-5PzY #insurance #claimsinflation #socialinflation #superimposedinflation

Social Inflation is one of the main drivers behind the increases we are seeing in liability and excess liability premiums. This article explains what is causing social inflation.

Property Owners: Are You Protected Against Discrimination Claims? Imagine this: A tenant claims you discriminated against them. How are you going to defend yourself when your General Liability excludes this type of claim? That's where Third Party Employment Practices Liability Insurance (EPLI) comes in. 📜 **Why You Need Third Party EPLI:** 1. **Protection Against Claims:** Covers legal costs and settlements if a tenant claims discrimination. 2. **Peace of Mind:** Safeguards your assets and reputation. 3. **Comprehensive Coverage:** Even without employees, you're protected from third-party claims. Don't wait until it's too late. Ensure you're covered with Third Party EPLI and protect your property investment today! 🛡️ #PropertyOwners #EPLI #Insurance #RiskManagement

AM Best US General Liability Market Outlook Remains Negative. Reflects ongoing and emerging liability exposures that are difficult to quantify. Social inflation, medical expenses & litigation financing are leading to rising claims losses and legal costs. Rate increases have lowered the sector's persistently high combined ratio. Adverse development remains a drag for the line. https://lnkd.in/eAYqP89S

Property-casualty reserves While insurer statutory filings give the most complete information on company reserves, annual 10-Ks also provide considerable insight. A review of the liability line reserves for a group of ten major property-casualty companies shows warning signs in many accident years which suggest that the industry could see a few difficult years ahead. Specifically, our 10-K reserve analysis shows: --For calendar year 2023, seven of the nine accident years for which incurred and paid loss development is reported (2014-2022) developed unfavorably. --Among the specific accident years, 2018 and 2019 have continued to develop negatively each year since their original reporting. For both years, the claims reported through 2023 are 10% above the estimates in the initial accident years. The fact that these years have had negative development is understandable considering those years were the early stages of the social inflation trend. --Years 2020 and 2021, which were bright spots for companies with favorable development in 2021 and 2022 reversed that experience in 2023 and developed unfavorably. This is a worrying sign for the industry. All told, these trends clearly are “red flags” for the industry as we look over the next few years. While this is just a quick summary, we have posted a detailed spreadsheet on our website www.gazresearch.com. The file is in Excel format for those who might want to do their own analysis. #Insurance#Property-casualty

This 'inflated justice,' as highlighted in the Swiss Re Institute's excellent report, is both a direct consequence of and a component within private capitalistic systems that increasingly necessitate private corrections to instill substantive equality—the core foundation of these systems. Across Europe and beyond, a range of interconnected socio-economic factors will drive the extension of distributive justice principles. We may be entering a saturated era of private justice, potentially paving the way for distributed private regulation of tort redress schemes and beyond. #MassTort #PersonalInjury #LiabilityClaims #ProductLiability #ClassAction #CollectiveRedress #CasualtyInsurance #SocialInflationIndex #EconomicInflation #CrossBorderClaims #TortLaw #AlternativeDisputeResolution #TrialBarStrategies #JuryVerdicts #CourtVerdicts #ObesityClaims #SocialInflation #InsuranceTrends #LitigationCosts #ClaimsManagement #Underwriting #RiskManagement #TPLF #CrossJurisdictionLitigation #LegalClaims #InsuranceIndustry, Martin Boerlin, James Finucane, Thomas Holzheu, Roman Lechner, Arnaud Vanolli, Shuyang Wu, John Zhu, Samer Abou-Jaoudé, Elias Farah, Jérôme Jean Haegeli, Swiss Re, Practiclaim™

Small business owners are often unaware of their fiduciary liability risks and if there are gaps in their insurance coverage. Help your clients avoid excessive fee lawsuits by advising them on their fiduciary duties and helping them identify possible risks associated with employee benefits plans. Read more in our blog post linked below.

Talking to your customers about the fiduciary liability risks is important for all #msps. Further, talking about the importance of #cybersecurity #insurance is just as crucial!

In a landmark decision, the Supreme Court ruled in Connelly v. U.S. that life insurance proceeds must be included in a company's valuation upon an owner's death, significantly impacting estate tax obligations and redemption liabilities. This ruling upends long-standing practices and could impose substantial financial burdens on companies. Our own Jeffrey G. Lewis, CPA, Anthony Duffy, and Michael Binz recommend reviewing your life insurance policies and ownership agreements to mitigate potential risks. Learn more about this new precedent: https://ow.ly/IA3T50Si4zq #advisory #consulting #valuation #lifeinsurance #estatetax If you’d like support developing a proactive plan that aligns with the new legal requirements, don’t hesitate to reach out to our Corporate Finance unit!

Interesting article regarding changes in the valuation landscape for entities with corporate-owned life insurance.