SAN DIEGO – Increased court awards and settlements are hitting insurers’ loss costs and may force risk managers to buy higher limits, according to an executive at insurance data company Zywave Inc.
Insurers have cited so-called social inflation – increased liability costs above traditional inflation – as a significant cause of increased losses for the past five years, and recent data analysis shows that liability losses are rising, said Kimberly Reilly, Cranford, New Jersey-based principal account executive at Zywave.
She was speaking Monday during a session at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference.
To ascertain the level of increased liability exposures, Zywave examined economic loss data from 237,000 records that amounted to $770 billion in total losses, she said.
The median cost of a single injury has increased (see graph). “It was bouncing around at about $1.5 million but is now almost $2 million in medical costs,” Ms. Reilly said.
She said losses that include the largest medical costs are often multiples of the median. For example, losses in the 75th percentile increased from between $2 million and $3 million in the…
