Verisk CEO Lee Shavel joins “On Point” to explore the role of data and digitization trends in the insurance industry. A top issue: Inflation is driving higher claims costs for insurers, and creating longer-term risk exposures, pricing and reserving challenges as consumers and businesses adapt to higher prices, Lee says. The cost to make and transport products, the cost for construction, and auto and home loss costs and repairs all have spiked. Another source of stress is social inflation driven by litigation and jury awards. It was aggravated by a backlog of cases in courts during Covid, Lee relates. Insurance data reported into Verisk shows growing loss ratios in GL, commercial auto and commercial umbrella, starting in 2015. And, these losses are fed by higher jury awards and defense costs despite a lower claims frequency. Florida is an acute problem, with 79% of property litigation in the nation but only 9% of homeowners claims. In response, insurers should leverage legal analytical tools to prepare for “nuclear verdicts” in the same way they do for natural disasters, Lee says.

This episode is supported by PersonalUmbrella.com, where you can quote stand-alone personal umbrella policies of up to $5 MM in 3 minutes online — just by answering 4 simple questions.

The post Rely on Data to Combat Loss Costs appeared first on Insurance Journal TV.