United states jury payouts are sending global insurance industry legal costs skyward. Insurer execs face a rising fear from the size and frequency of awards jurors are requiring the firms to pay out to plaintiffs.LitigationLiability
The trend is being called “social inflation” as juries demand more frequent and generous payouts that insurers must cover for cases ranging from tainted talc to opioid overdoses. These rising insurance industry legal costs are already cutting into profits. Moreover, as the trend is expected to grow, the impact will only become more challenging.
The timing of this trend is a difficult one for the industry, as it is already leaning on profits to hold up the reserves they must keep up for payments funding.
The Financial Times interviewed Rob Francis, healthcare underwriting head at ProAssurance, an American property and casualty insurance company.
Francis underscored the number of legal payouts his own firm was required to cover, such as $230 million on behalf of a Baltimore hospital it covered and that lost a malpractice suit. In fact, that was the largest malpractice award a plaintiff has received in global history.