Each year, RIMS hosts the largest gathering of global risk professionals to connect and learn. From overarching industry disrupters to recent trends, here are some of the most interesting issues that were discussed at this year’s event.
Autonomous Vehicles Will Continue to Disrupt the Insurance Market
New automobiles are being built with enough autonomy to operate with minimal driver input with features like adaptive cruise control, hands-free steering, and more. When this occurs, where does the fault lie if there is a crash? Various states have already begun creating regulations that will be amended from year to year to address accidents that will be attributed to the vehicle rather than to the driver. Autonomous driving features with built-in programming choices or equipment/software failures could lead to crashes, and this will create liability risk for the manufacturer. These issues create implications for insurance carriers as well. Insurers may begin encouraging the switch to using autonomous vehicles due to the risk mitigation benefits they provide. Reduced losses could come from the automation, and carriers could bring that into their premium strategy. However, due to the new or increased exposures autonomous vehicles also bring, auto liability coverage alone may no longer suffice. There will likely become a need for cyber liability and product liability to help protect against these risks.
Poor Workers’ Compensation Outcomes Driven by Stress & Anxiety
Stress and anxiety can have dire effects on workers’ compensation outcomes, impacting areas like tissue healing, rehabilitation efforts and, ultimately, return to work. The workers’ compensation advocacy model offers the following building blocks to an effective approach:
We must listen to and engage with our injured workers to determine what is going on in their lives. This will help to have empathy for their situation and understand how we can engage the right resources to best assist them in recovery. Telephonic case management, behavioral health case management, field case management, and an empathetic adjuster are beneficial for injured workers that struggle with stress and anxiety. Helping them get top-notch medical care, knowing their TTD and pay processes, and other items important to the injured worker can be a big benefit to minimizing stress and anxiety during the claim, which in turn leads to engagement and compliance.
Nuclear Verdicts Continue to Affect Liability Cases
Large verdicts continue to become larger and more frequent in liability cases. Defined as a jury award that is $10 million or over, product liability, auto liability, general liability, and personal injury are the cases that are at the most risk of resulting in a nuclear verdict. There are several contributing factors to this trend. First, there are now third-party litigation funding organizations that stand to benefit from nuclear verdicts. Second, attorneys are becoming more aggressive in their advertising with the promise of large payouts. Third, there is a lack of tort reform to serve as a control for this issue. One strategy is to offer the defense a settlement number in every trial. The plaintiff will use it to figure out which jurors are comfortable with high awards and establish a baseline value for the case. Mock trials can help with the determination of that offer. Technology solutions are also emerging, including predictive modeling that can help identify litigation triggers and provide alerts to the adjuster on the possibility of a nuclear verdict.
Liability Issues Become Primary Challenge for Public Entities
Various liability issues are causing many challenges for public entities.
- The insurance market has become challenging for public entities to buy coverage. In some cases, they often seek unlimited liability or extremely high limits, which is hard to place.
- Cities with no state tort caps, like the state of Illinois, see astronomical costs related to liability. Public entities seek tort reform in those states with no tort caps.
- Now that COVID controls are lifting, trials are speeding up and schedules are extremely busy to address the cases going to court.
- Some plaintiffs’ attorneys are looking for fame and do not want to negotiate settlements in lieu of pursuing nuclear verdicts. This makes it hard for them to be reasonable in accepting settlement offers.
- School districts are experiencing a dramatic influx in claims as the statute of limitations for sexual misconduct claims has been extended. This is sweeping, so if it has not happened in your state, it is likely to come.
- Public transit experiences “frequent flyers” that submit a regular cadence of claims. They are working to monitor situations with video and try to keep their approach to those claims decisions fact based.