Navigating the Rising Tide of Massive Insurance Claims: Insights and Strategies

The Growing Trend of Large-Scale Claims in the Insurance Sector

The insurance industry is witnessing a surge in claims that have the potential to exceed $100 million, driven by mass torts and class actions. Ellen Greiper, a partner with Lewis Brisbois, noted that seven to nine figure verdicts are becoming increasingly common. Sherman “Tiger” Joyce, president of the American Tort Reform Association, highlighted the trend of courts being used as a vehicle for public change, exemplified by the tobacco litigation in the 1990s and the ongoing opioids liability litigation. The sheer number of claimants is driving astronomical verdicts, such as the $775 million verdict in the Xarelto® blood thinner lawsuit, which involved 25,000 claimants.

Challenges and Responses from the Insurance Industry

The insurance industry is grappling with the frequency and severity of these large-scale claims. Jim Blinn and Jesse Paulson discussed the growing number of verdicts breaching the $1 billion threshold, citing examples like Monsanto’s Roundup, Johnson & Johnson’s Pinnacle hip replacements, and PG&E’s Camp Fire related losses. Kathy Reid from Berkshire Hathaway Specialty Insurance emphasized the importance of having comprehensive information about clients to mitigate uncertainty and manage costs effectively.

Identifying and Mitigating Risks

Insurance executives are particularly concerned about incidents causing multiple claims, such as train wrecks or industrial explosions. Aging infrastructure and rising fatalities in commercial auto are also significant areas of concern. In premises liability, businesses are increasingly being held liable for crimes committed against customers in parking lots and garages. To navigate these challenges, insurers need to stay informed about legislative changes and continuously assess and update their risk management strategies.

In conclusion, the insurance industry must adapt to the evolving landscape of large-scale claims by enhancing data collection, staying abreast of legislative changes, and adopting proactive risk management strategies. For readers, it is crucial to understand the trends and challenges in the insurance sector to make informed decisions and protect their interests effectively.