4 Key Insights from the APCIA Annual Meeting

The American Property Casualty Insurance Association (APCIA) Annual Meeting hosts industry professionals from across the U.S., providing an opportunity to explore economic, political, technological, and other forces affecting property casualty insurers.

Mark Walls, Vice President of Client Engagement at Safety National, attended the event and offered some of the highlights from its educational sessions.

1. The reinsurance market has seen growth of around 2-3% through 2024.

Although many of the APCIA sessions’ thought leaders expected more growth, the key is balancing terms and pricing, so the primary layers aim to cede off risk rather than retain more of it. Terms need to be structured so that expected losses do not trigger coverage, but this has become increasingly difficult because of significant losses in areas that are difficult to model, such as wildfires and large convective storms.

2. Tort reform remains a major concern with increased legal system abuse.

Overall, the general public does not seem to understand the economic impact of legal system abuse, whether that is reflected in increasing insurance premiums or higher costs on goods and services. Advocating for reforms that will help to rebalance the legal system to address frivolous lawsuits and decrease or eliminate outside influence and interests caused by litigation funding is a necessary first step toward managing liability insurance costs for businesses and insurers alike.

3. Third-party litigation funding is a national security threat.

Few jurisdictions have disclosure rules. In those that do, there is a noticeable and concerning trend of foreign corporations funding litigation. For example, Chinese companies are funding patent litigation against tech companies and requesting sensitive intellectual property information in the discovery process, which could give them marketplace advantages. The extent of foreign engagement in litigation financing is unpredictable, and the intent behind their involvement could be dangerous.

4. Disclosure rules could significantly impact liability claim outcomes.

Insurance and stakes in judgments on appeal are being sold, allowing those initially involved to cash out while litigation continues. This is a commercialization of the judicial branch of our government. Without third-party litigation financing disclosure rules, judges are unable to see if there are any conflicts of interest in cases. Some federal judges have imposed disclosure rules, making a significant impact, but this is not widespread. Laws would make this more consistent instead of the current approach that leaves it up to judicial discretion.