ARM® News

Oil Spill, Chinese Drywall Drive Fears of Tort Spike

7/6/2010 2:06:23 PM

There are signs of tort inflation in 2010 and 40 percent of companies anticipate it, said the Insurance Information Institute (I.I.I.) in a recently released report.The report, “Tort Inflation 2010: Stability Today, But For How Long?” examines some factors that could lead to an increase in legal disputes—a trend tracked by the institute because it could correlate to higher insurance costs.

The oil spill in the Gulf of Mexico “could tap a host of liability coverages” in the near future, and one law journal cited in the I.I.I. report noted that lawyers see it as having the possibility to become “one of the biggest class actions in U.S. history.”

Additionally, Toyota faces dozens of class-action lawsuits, defective Chinese drywall could be another target of mass torts, and global warming has already generated claims against companies, I.I.I. said. The institute also noted that Illinois and Georgia have overturned medical malpractice caps, and other states are considering the same.

Other factors include the observation by I.I.I. that more elected officials are “sympathetic to plaintiffs’ attorneys.” The economy furthermore spawns discrimination lawsuits.

A survey by international law firm Fullbright and Jaworski shows 40 percent of companies anticipate more legal disputes in the future. This includes 56 percent of insurance companies, up from 35 percent a year ago.

Tort costs have increased at twice the rate of inflation, leading insurers to constantly consider the factor in rates because claims received by a liability insurer are not paid until several years from now, with some settlements taking even longer, I.I.I. said.

Source National Underwriter

He (Lloyd’s Chief Executive Richard Ward) went on to say that Lloyd’s is improving its claims handling capabilities that gives it “a truly competitive advantage for the market” and will prove a great benefit for customers.

Property-Casualty.com

Monday, June 14, 2010

2010 provides a great opportunity for the London market. We have proved we can adopt technology to deliver efficiency to our processing; and we have demonstrated that this can work as well in the front office as the back. Our endorsements plans will take this forward and help us deliver the sorts of benefits to our placing process that ECF has delivered in the claims arena.

Paul Jardine, Insurance Journal

Friday, January 22, 2010

North America is an important component of business for the London market, and Lloyd’s is working on improving the electronic transaction of data on both binding and open market business, and thus believes it is important to be part of this joint industry group (US Retail Agent E&S Initiative),” said Adam Stafford, senior project manager of Lloyd’s market operations.

Property-casualty.com

Wednesday, June 16, 2010

Continuing business process improvements, Solvency II and the Claims Transformation Project are just some of the issues we are helping market practitioners prepare for. During my tenure as Chairman, the LMA will continue to represent the interests of underwriters in the many issues central to achieving a profitable and appropriately regulated market.

Barnabas Hurst-Bannister

InsuranceJournal.com

Friday, May 28, 2010