Insurance claims are growing increasingly severe and complex, challenging risk professionals to develop more effective plans and work closely with insurers and other stakeholders, panelists on Marsh’s The New Reality of Risk® webcast said.
Among other challenges, businesses are facing a spate of so-called “nuclear” verdicts that far exceed historical norms, said Sri Sridharan, Marsh’s chief claims officer for the US. This has been driven in part by a more organized and aggressive plaintiffs’ bar, social inflation stemming from greater distrust of businesses and the desire for juries to hold them accountable, and litigation financing that is enabling plaintiffs to resist settling cases before trial.
These and other trends are prompting insurers to introduce far-reaching coverage exclusions in policies, limiting capacity for certain risks, and stifling innovation and growth among insurers. They also mean that policyholders must be prepared for more difficult experiences when managing large and complex claims.
To better manage complex claims, risk professionals must collaborate with all stakeholders, including insurers at all levels of their towers and defense counsel, ensuring effective communication among all parties from the beginning, Sridharan said. Brokers can play a critical role in facilitating communications, resolving coverage disputes, and providing other expertise.
Risk professionals should also carefully review their historical insurance programs, including identifying potential gaps and missing policy documents, Moran said. Insurance archaeology exercises can help organizations to recover and electronically preserve missing documents that can be critical to managing legacy claims.