Social Inflation Webinar: Your Questions Answered

Yesterday was the PLUS hosted webinar on social inflation. William Wilt and Alan Zimmerman did a fantastic job presenting their research on the topic. While there wasn’t time to get to every audience question during the webinar, our speakers took the time to answer the remaining questions below. A huge thank you to both our speakers!

Weren’t able to make it to the live webinar? The webinar recording will be available to members on the PLUS website here.

1. There’s no “Federal Reserve” charged with managing social inflation! But are there things that insurers can do to mitigate the effects of social inflation?

Many (maybe, most) insurers are currently taking steps to mitigate the impact of social inflation – raising deductibles and attachment points, lowering policy limits and raising prices. Through trade organizations many insurers are involved in the political and regulatory process including efforts to temper the current trend toward reversing tort reforms enacted in the earlier 2000s (e.g., Pennsylvania just expanded its statute of limitations for medical malpractice claims).

2. Which states are prone to social inflation California? Florida? Texas?

Yes – all three!  We gather this is a nationwide trend but do think there is value to studying (and watching for trends) at the statewide level.  We mentioned the unwinding of tort reform in PA and there are other states where that has happened as well (Texas may be one…it requires further study).  The trends do not necessarily align neatly with political lines.  For example, most insurers are experiencing legal challenges in Florida (e.g., AOB benefits and auto PIP) even though that state is largely controlled by Republicans.

3. Do you have any data measuring social inflation impact on private D&O or EPL specifically?

We do not, sorry, other than medical professional liability included in the slide deck.

4. Are you aware of any data or studies that explore the impact of social inflation in employment practices liability litigation? Perhaps specifically looking at the impact of the #MeToo movement?

We are not but suggest that it might be worthwhile…perhaps some law firms have published on the topic? Anecdotally, we’re aware that suits alleging harassment at the workplace are of particular concern to liability insurers.

Wilt Professional Pic 2013William Wilt is the president of Assured Research, a boutique research firm producing subscription content focused on business development, financial, legal, claim and other topics relevant to (re)insurance professionals.  Clients of Assured Research include global and U.S. focused (re)insurers, brokers, and consulting firms writing or controlling some $150 billion in premiums.  Assured Research also provides analytical content for the insurance investment community.

Bill’s 30-year career in insurance encompasses a range of professional roles.  Bill began his career as an actuary at a major reinsurance company and continued in the actuarial profession at a Big Four accounting firm.  Bill spent five years as a senior analyst at Moody’s Investors Service, followed by seven years at Morgan Stanley, where he was the lead equity analyst following over 20 (re)insurance stocks.  Prior to forming Assured Research, Bill worked in corporate development at two insurance companies where he oversaw M&A, risk management and business development, as well as rating agency relations.

Alan ZimmermannAlan Zimmermann is a Managing Director at Assured Research, LLC a research and advisory firm concentrating on the property-casualty insurance industry. He is a long-time insurance analyst who focuses much of his attention on accounting, regulatory and other global macro-industry matters.

Prior to joining Assured Research in 2013 he was the head of the property-casualty insurance research team at Macquarie Securities which he joined in 2009 with the acquisition of Fox-Pitt, Kelton Cochran Caronia Waller.  At FPK he held a variety of managerial and investment oriented positions including Director of US Research, Head of US Equities, and international research coordinator.

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The Professional Liability Underwriting Society (PLUS) was founded in 1986 by industry professionals who recognized the need for a forum for individuals involved in the field of professional liability. The Society is a non-profit organization with membership open to persons interested in the promotion and development of the professional liability industry. Membership consists of over 6,500 individuals, representing over 1,000 companies active in the many fields of professional liability. PLUS currently receives the support of more than 200 companies through corporate membership. PLUS is recognized as the primary source of professional liability educational programs and seminars, assistance to its members to help serve clients, and information regarding professional liability. The Society is continually seeking new means to fulfill its mission statement and better serve its members.

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