From the Editor's Desk
Taking It to Court
Plaintiffs head to court in cases dealing with cyber coverage, opioids and childhood sex abuse. For insurers, social inflation and other legal issues have become hot topics.
- Patricia Vowinkel
- September 2019
It came up time and time again on second-quarter earnings calls this summer. Top insurance executives spoke about litigation trends, the tort environment, social inflation and reviver statutes that give childhood sex abuse victims more time to pursue civil and criminal actions.
Travelers CEO Alan Schnitzer cited litigation funding as another concern. Schnitzer spoke about more active and aggressive litigation and said the company is monitoring the growing amount of capital being raised in litigation finance as an asset class. This influx of capital for plaintiff expenses may contribute to the rising costs for insurers, he said.
AIG's Peter Zaffino, group chief operating officer and the CEO of general insurance, said in the company's earnings call that AIG is watching the evolving developments in the tort environment, with the expanding impact of “social issues and social inflation.”
Noting that these are not new issues, Zaffino said AIG has been following legislative and case law developments for some time, including their relationships to proposed and adopted “reviver statutes.” Hartford Financial Services CEO Christopher Swift said the company is watching potential claims trends as states seek to implement “reviver statutes” with their potential effect on bodily injury and mass tort claims, whether on a primary or excess basis.
Hartford is involved in three areas—commercial auto injury liability, sexual abuse and reviver claims, and head injury.
Chubb CEO Evan Greenberg noted the variability in loss cost trends in professional lines such as D&O. “In the tort environment, generally there has been less of an increase in frequency but there have been headlines of an increase in severity in jury awards,” Greenberg said. Trends including the #MeToo movement and molestation claims raise “the specter of the future of reviver statutes, which is unknowable at the time.”
September is Litigation Awareness Month. The September issue focuses on several significant legal issues and the impact on insurers.
In “An Act of War?” Best's Review examines the legal battle over the use of the war exclusion to deny a claim for property damage caused by a cyberattack.
In “The Opioids Reckoning,” Best's Review looks at lawsuits filed against not just drugmakers but also distributors and pharmacies to recover costs stemming from the opioid epidemic. Many of those companies have or will submit claims under their liability insurance.
In “Opening the Door,” Best's Review covers the emerging issue of reviver statutes that allow victims of childhood sex abuse more time to file civil lawsuits. In July, AM Best issued a related commentary “Expanding Child Victim Compensation Laws Could Adversely Affect Insurers.”
The September issue also includes coverage of asset management. In “Building Up Assets,” Best's Review speaks with Paul David, director and head of Americas, infrastructure debt at Allianz Global Investors.
To read these and other features, go to www.bestreview.com.