Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading COVID-19 Comp Claims Far Less Than Anticipated. This week we’re bringing you:
Pandemic ushers in a brand new world for claims*
There’s no question that the pandemic has pushed the insurance industry fully into the digital age. Alongside changes to many of their processes, there’s also a heightened need for insurers to protect their clients and provide them efficient claims services by implementing digitalization effectively. However, industry experts caution that a path to digitalization that works for all parties involved should prize making progress over being perfect on day one.
During a recent webinar, leaders from the claims space sounded off on how they’ve gone down the digital path over the course of 2020, and the lessons they’ve learned.
“Our purpose is to make lives better by solving the financial challenges of our changing world, and clearly 2020 has been an example where the world has changed dramatically,” said Evan Scarponi, chief claims officer at Prudential, speaking during the Reuters-hosted panel, “Progress over Perfection: Build the Best Digital Claims Journey.”
The topic of ‘progress over perfection’ resonated with the claims leader for a few reasons, the first being that COVID-19 has forced Prudential to think differently, and be more flexible in the face of rapidly shifting customer needs and macro trends. Today, the insurer has to deliver improvements to claims in a more agile fashion and in a way that allows the company to test and gather feedback from users, tweaking its processes as it goes along.
Workplace parking lot injuries focus of proposed legislation*
Proposed legislation in New Jersey that would expand what constitutes workers’ compensation when it comes to slips, trips, and falls in employer parking lots has legal experts anticipating movement in other states where such claims are often considered case by case.
S.B. 771, which passed the New Jersey Senate on Jan. 11 and is now with the Assembly Labor Committee, would change the compensability of parking lot slips, trips, and falls. The bill states that if an employer provides or designates a parking area for employees, their employment commences when they arrive at the area and ends when they leave it.
Currently, most states do not have in place such guaranteed acceptance of parking lot injuries on the basis of lot ownership and maintenance, according to legal experts who say the move could lead to more litigation, a surge in claims, and possible fraud.
Parking lot injuries are “an open question in a lot of states, and New Jersey is trying to make it clearer,” said Howard Wexler, a partner in the employment practice at Seyfarth Shaw LLP in New York. “In the Northeast this time of year there are lots of times when employees slip and fall in the parking lot. There would definitely be an uptick in the amount of (accepted) workers comp claims” if the bill becomes law.
Everyone’s getting burned in D&O insurance*
The directors & officers (D&O) insurance market could be likened to a dumpster fire in which everybody is getting burned. D&O carriers are struggling with unprecedented losses on the back of years of relatively soft (potentially inadequate) premium pricing. Clients are struggling to adjust to harder market conditions, where they’re offered soaring rates for lower coverage limits and stricter policy terms and conditions. And brokers and agents are taking hits left, right and center as they try to negotiate the best possible outcomes through these very difficult conditions.
There are a multitude of factors driving hardening conditions in the US domestic D&O insurance market. Litigation and settlements are key contributors, with securities class actions reaching an all-time high in 2019, derivative suits also on the rise, and both settling for large dollar amounts, as reported in Woodruff Sawyer’s 2021 D&O Insurance Trends: A Looking Ahead Guide. On top of that, directors and officers face a wide range of emerging risks, including uncertainties around the ongoing COVID-19 pandemic, heightened risk of bankruptcy, and politics/ESG in the boardroom.
It’s very likely that brokers will continue to find the D&O market tough in 2021, according to Priya Cherian Huskins, senior vice-president of management liability at Woodruff Sawyer – the primary reason being that premiums are expected to continue rising. In Woodruff Sawyers’s 2020 Underwriters Weigh In survey, which features 34 major D&O insurance carriers in the United States, 100% of respondents said they believe D&O exposure is increasing, and therefore they expect premiums to go up in tandem.
“Another reason I believe brokers will continue to have difficulty is that the worldwide D&O insurance market is seeing very little new capacity,” said Huskins. “In other times, if the US market was especially difficult, maybe brokers could get more help from the London market. But the London market is arguably in worse condition than the US domestic D&O insurance market right now.”
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