For the first time since February 2020, PARMA hosted its annual conference in person, with public agencies gathering in Anaheim, California, to discuss a broad spectrum of risks impacting their industry. Over 50 percent of attendees represented either a public entity or joint powers insurance authority (JPIA).
Safety National’s Vice President of Client Engagement, Mark Walls highlights his top five takeaways from the event.
The Continued Impact of COVID
Risk management has played a significant role in the COVID-19 response for municipalities. Evolving state and local guidelines continue to consume risk manager responsibilities. Public entities are experiencing a surge in accommodation requests, primarily from employees that want to remain working from home. A lack of employees wanting to reenter a physical workspace has created an abundance of staffing challenges.
Climate Change Implications
Wildfires in California continue to be a growing problem impacting much of the state. This issue is not only impacting property losses, but also workers’ compensation and employment practices, with worker exposure to excessive smoke becoming increasingly more common. Insurance carriers are facing the challenges from ever-changing models of wildfire risk throughout the state, as new areas become prone to blazes where fire outbreaks were previously rare.
A Challenging Cyber Risk Market
The cyber marketplace for public entities is extremely arduous. Insureds that cannot meet the minimum requirements with their current cybersecurity program may face little-to-no coverage, even at its highest cost. Many entities do not have the required cyber infrastructure and lack the budget to upgrade to meet these requirements. For those entities that can get coverage, the costs are increasing at a dramatic rate.
With courts shut down and trials delayed for the last two years, cases have incurred ongoing defense costs and stagnant progress. In response, claims costs are increasing and typical actuarial development patterns for entity liability claims have been disrupted. Entities are also experiencing an increase in multiple forum cases with litigation being pursued in workers’ compensation, employment practices liability and general liability for the same incidents.
Repercussions of Large Verdicts
The litigation environment has also created significant challenges for the liability and auto insurance market in California. The courts are consistently delivering unfavorable and large verdicts, which is sorely impacting the reputation of California’s litigation environment. These challenges are making it increasingly difficult for insurance carriers to distinguish their programs as best in class or adjust their rates.