5 Key Takeaways from RIMS 2022
As one of the industry’s most-attended conferences, the in-person return of RIMS was highly anticipated! We cover some of the most significant challenges facing employers discussed in the event’s hard-hitting sessions, from collateral complications to losses driven by social inflation.
April 22, 2022
With over 8000 attendees, this year’s RIMS annual conference in San Francisco made a strong return with its first in-person event since 2019. With participants eager to network, the setting provided an opportunity for casual collaboration where virtual substitutions may have not. With over 200 available industry sessions, RIMS provided an in-depth analysis of market conditions, emerging risks and more impacting employers today. Safety National’s Vice President of Client Engagement, Mark Walls, explores some of his takeaways from the conference.
Employers with large deductible workers’ compensation programs face growing complications with collateral being held by carriers. This collateral diverts funds that could be used to grow their business and makes it extremely difficult to change carriers, even when dissatisfied with the relationship. Previously, brokers had discussed developing a potential solution to the collateral conundrum. While nothing has come to fruition just yet, it could be a turning point for employers.
Cyber Coverage Concerns
The cyber marketplace continues to be a primary concern of risk managers. As companies adapt to all-too-common ransomware attacks, the cyber insurance marketplace is responding to the continued evolution of cyber risks by increasing rates and reducing capacity. In fact, risk managers have reported rates nearly doubling for half their prior capacity, while public entity risk managers are challenged with securing cyber coverage at any rate.
Workers’ Compensation Stability
Workers’ compensation remains the most stable casualty line of insurance in terms of rates, but there are concerns about trends that may impact rates in the future. Workforce shortages have forced employers to do more with less while using lesser trained employees, which could lead to an increase in claim frequency. Costs associated with catastrophic workers’ compensation claims also continue to increase as advances in medical science prolong life expectancies for those with significant injuries. Additionally, staffing shortages have led to a dramatic increase in rates for home healthcare nurses, who are commonly used in catastrophic injury claims.
Social Inflation Losses
General, auto and umbrella liability lines have faced massive losses due to social inflation, leading carriers to increase rates and reduce capacity in coverage. Unfortunately, there is no solution to this trend of increasingly high jury awards which are growing every year. Even with little to no perceived liability on the part of the business, cases are still seeing awards in the millions. State tort reform could offer potential relief but has not yet gained any traction.
Talent Shortage Repercussions
With retirements rapidly increasing, the industry is managing a significant loss of institutional knowledge and a growing talent shortage. Talent attraction, retention and training remain a top priority for employers concerned not only with their own staff, but with the staffing of their TPA and carrier claims operations. Unfilled claims positions and high turnover could lead to higher claims costs.