Insurance companies have lost control of their claims frequency and the use of technology enabled claims instigation practices to drive more claims through litigation has become a significant social inflationary threat to the industry, with ramifications for the reinsurance and insurance-linked securities (ILS) market, speakers explained in our latest Artemis Live video interview.
One of the key drivers for this trend is not very well understood across the industry, the use of technology and advanced digital marketing techniques to instigate claims and drive them through law firms, resulting in higher claims and litigation as well.
This has become a significant issue for insurers that are facing the explosion in claims these practices are driving.
As their claims frequency has now run away from them, becoming less and less predictable in recent years, as this trend has exploded.
It’s also an issue of great relevance for the reinsurance and ILS capital providers that can be on the hook for higher losses as a result, with this trend likely to have driven some amplification of claims that flowed to these markets in recent years, especially after major catastrophe events.
We spoke with Joe Petrelli, well-known in the industry as the President and Co-Founder of rating agency Demotech and now also a co-founder of 4WARN Inc, and Todd Kozikowski, CEO, co-founder and shareholder of 4WARN, INC for this new video interview.