Tort issues are a persistent threat for insurers everywhere. Over the course of decades the abuse of the U.S. legal system has had a direct and tangible impact on insurer operations. This new report, written by Robert Hartwig, an economist and president of the Insurance Information Institute (I.I.I.), and Claire Wilkinson, vice president – Global Issues of the I.I.I., examines how the change in political regime following the November 2008 elections and a deteriorating economy are reshaping the liability climate in which insurers operate. In recent years, considerable successes at tort reform at both the federal and state level appear to have had a restraining influence on the rate of growth of U.S. tort costs. However, after a brief decline of 5.6 percent in 2006, tort costs are on the rise again. Against the backdrop of the financial crisis and downturn in the economy, the change in administration as well as shifts in the U.S. Congress herald a sustained period of increased regulatory and legislative activity. These factors, combined with the plaintiff friendly legal system that exists in the U.S. are causing the tort pendulum to swing against businesses and their insurers once more. The full report can be accessed on the I.I.I. Web site at http://www.iii.org
This study is part of an annual series that provides an overview of key trends in the legal environment that impact or are expected to impact legal liability risk in Continental Europe, including Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden and Switzerland. The full report can be downloaded at: http://www.guycarp.com/portal/extranet/insights/reportsPDF/2009/Recent%20Legislative%20and%20Judicial%20Developments%20in%20Continental%20Europe%202009?vid=1
This paper highlights emerging trends in credit crisis-related securities litigation, including filings, percentage of cases involving directors and officers (D&O), types of defendants and plaintiffs, and recent decisions with emphasis on cases involving complex financial products such as collateralized debt obligations (CDOs) and credit default swaps (CDS). The study found that credit crisis filings increased 172% in 2008 over 2007, rising to 188 cases from 69. The percentage of cases in which directors and officers are named as defendants remains high, with 62% named in suits in 2008, compared to 68% in 2007. Asset management firms became the main defendants in litigation in 2008 as opposed to lenders and home builders in the previous year. Structured products (CDOs and CDS) were involved in 3% of the lawsuits in 2007 and 22% of the lawsuits in 2008. A news release with a link to the study is posted on the Web at http://www.nera.com/PressRelease.asp?pr_ID=3848
Economic turmoil and the second worst year on record for insured natural catastrophe losses did not deter falling commercial insurance prices in 2008, according to the 2009 RIMS Benchmark Survey book, the annual guide to the cost of risk for commercial insureds in North America. Lower average premiums in almost every line of business contributed to a 9.4 percent drop in average total cost of risk (TCOR) per $1,000 of revenue. The 2009 book also presents findings from two new surveys on enterprise risk management (ERM) and workers’ compensation claims management. The broker services and remuneration survey, which was introduced last year, provides another look into the relationship of commercial insurance buyers and their brokers. Further information is posted at http://www.rims.org/aboutRIMS/Newsroom/News/Pages/06_09BBookblur.aspx
The United States Global Change Research Program has released a report indicating that the effects of climate change are already being seen in the U.S. For example, it is evidenced in the shifting migration patterns of butterflies and heavier downpours in the Midwest and East. The report predicts that the effects of global warming will become more severe even if the U.S. takes significant action to limit emissions of greenhouse gases. Farms, forests, coastlines, floodplains, water and energy supplies, transportation and human health will all be affected. Thirteen federal agencies and the White House worked on the program under a 1990 law that requires reporting on changes in the environment from natural and human causes every 10 years. The first study was released in 2000, and the current study was begun in the George W. Bush Administration. Among the changes cited in the report are more powerful tropical storms and the erosion of ocean coastlines caused by melting Arctic ice. The study was overseen by the White House Office of Science and Technology Policy. The report is posted on the Web at http://www.globalchange.gov/publications/reports/scientific-assessments/us-impacts/newsroom
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In its first global status report on road safety, the World Health Organization (WHO) said that only 15 percent of countries have the comprehensive laws needed to address five key risk factors: speeding, drink- driving, seatbelt use, child restraints and the use of helmets. Where laws on these risk factors are in place, they are often inadequately enforced, particularly in low-income countries. WHO noted that enacting and enforcing legislation is critical in influencing exposure to the risk of a crash, crash occurrence and injury severity. Road traffic fatalities are predicted to rise to the fifth leading cause of death by 2030, resulting in an estimated 2.4 million fatalities per year, according to WHO. The report is posted on the Web at http://whqlibdoc.who.int/publications/2009/9789241563840_eng.pdf
A new report on workplace trends by Citrix Online, offers a snapshot of the evolving trend to the location independent workplace, based on a survey of workers and owners of small businesses in the United States, the UK and Australia. Among the findings: Nearly 75% of all workers want the freedom to work remotely from home or somewhere else away from the office, yet most workers don’t have the option. This desire is so strong that 1 in 5 workers are willing to relinquish 5% of their salary to work offsite 1–2 days a week. Findings and a link to the study are posted on the Web at http://www.citrixonline.com/pr/pressRelease.tmpl?FileID=051309&nrgp=&nryr=&SourceTemplate=expertcity%2Fpr%2FpressReleases.tmpl%3Fnrgp%3D%26amp%3Bnryr%3D%26amp%3Bnrpf%3D0
New York is the worst city in the U.S. for road rage, according to the fourth annual In the Driver’s Seat Road Rage Survey, commissioned by auto club AutoVantage, New York is joined by Dallas/Fort Worth, Detroit, Atlanta and Minneapolis/St. Paul as the five worst cities for road rage. This year’s survey sought to define road rage and responses pointed to two key attributes: angry drivers, including drivers who overreact and lose their tempers, and aggressive driving, including cutting into lanes, tailgating, speeding and honking. Behaviors by other drivers that cause stress for commuters and can lead to road rage include: drivers who talk on their cell phones (84 percent see this every day); driving too fast (58 percent); tailgating (53 percent); drivers eating or drinking while driving (48 percent); and texting or emailing while driving (37 percent). The report is posted on the Web at http://www.affiniongroupmedia.com/themes/site_themes/affinionassets/releases/autovantage/Road_Rage_09/about.htm
A report on the global terror insurance market, published by Guy Carpenter & Company finds that governments are becoming increasingly involved in the development of insurance programs focusing on terror coverage and terror pools, though a number of nations continue to offer no government support at all. The report summarizes terror insurance market developments in 34 countries across six continents. According to the briefing, developments on a country-by-country basis are being shaped largely by events, including new or evolving threats and local developments in the insurance and reinsurance markets. The update also addresses the impact of terror insurance on the aviation market and looks at recent developments in terror modeling. For further information see http://www.gccapitalideas.com/2009/06/22/global-terror-update/#more-3541
This Government Accountability Office (GAO) report suggests that the Federal Emergency Management Agency (FEMA) needs to improve national preparedness for a catastrophe. The GAO found that 68 percent (49 of 72) of the plans needed to implement a national preparedness system, including several for catastrophic incidents, are not yet complete, even though 41 of 50 policies needed to define roles and responsibilities of key officials involved in implementing the plans have been completed. GAO notes that the lack of clarity in response roles and responsibilities among the diverse set of responders contributed to the disjointed response to Hurricane Katrina and highlighted the need for clear, integrated disaster preparedness and response policies and plans. According to GAO, although best practices for program management call for a plan that includes key tasks and target completion dates, FEMA does not have such a plan. The report is posted on the Web at http://www.gao.gov/highlights/d09369high.pdf
This study provides an overview of the progress and setbacks of civil justice reform over the past decade, and discusses the outlook for future reform efforts. The report includes a discussion of the impact of election results; modest reform gains from 2005 to 2009; attempts by the plaintiffs’’ bar to expand avenues of liability; the Consumer Product Safety Improvement Act of 2008; the proposed Sunshine in Litigation Act; and the top ten verdicts of 2008. The paper is posted on the Web. Click here.
