Grappling with generational gaps & hitting back at nuclear verdicts
Here is some of what you may have missed during Day One of the Complex Claims & Litigation Forum in Las Vegas.
It was only fitting that the 2024 Complex Claims & Litigation Forum kicked off on Mon., Feb. 26 in Las Vegas with a robust discussion of many of the challenging issues facing today’s insurers and litigators.
Carey Bond, head of U.S. claims for Lloyd’s, addressed some of those issues during a keynote speech that launched the conference at the Green Valley Ranch Resort.
A retired U.S. Army lieutenant colonel who has more than two decades of experience in claims management, Bond encouraged attendees to work on closing gaps that are prevalent in the industry and to do so by challenging conventional norms.
The four specific gaps that Bond said risk evaluators and defense counsel must bridge are the increasing reliance on cyber technology and the burgeoning field of artificial intelligence, regulatory compliance, climate change and the change in customer needs.
Speaking to the cyber component, Bond noted that technological advancements have benefited all facets of the property and casualty insurance industry. At the same time, though, he said it’s important for both insurers and regulators to understand that these modern conveniences aren’t foolproof.
Nor are they embraced by every customer.
“If you sent my 88-year-old mother an app and said, ‘Go take a picture of your [damaged] car’ or ‘Take a picture of that hole in the wall,’ that claim will sit there for 10 years and never get resolved,” Bond said. “As for AI, what exposure do you risk if you use it? And if there’s a flaw in it, who’s responsible?
“So some of the things we have to think about as gaps are all this great stuff that increases productivity.”
When it comes to tackling these gaps, Bond said industry professionals would be wise to think outside the box rather than rely on timeworn traditions.
For instance, claims professionals might believe they know their customers and understand their market. But the reality is customer wants and needs adapt from one generation to the next, as does the market itself.
“So do we really know our customer? Well, the reality is we are our customer,” Bond said. “We’re now starting to learn what that really means. And it doesn’t always mean what it meant last week.”
A panel discussion that followed Bond’s presentation offered a broader overview of the state of the complex claims and litigation industry.
Addressing nuclear verdicts
Jonathan Schwartz, an attorney with Freeman Mathis Gary, LLP, moderated the panel, with four professionals providing insights on emerging challenges and trends within the industry.
One of the topics that was broached centered around “nuclear verdicts” — that is, the growing trend of juries awarding massive judgments to plaintiffs in complex claims trials.
Geoff Borger, an industry veteran who serves as the casualty claims leader for Nationwide, pointed to the strength of the plaintiffs’ bar as one reason nuclear verdicts have become increasingly prevalent.
“The plaintiffs’ bar has gotten really good at scaring jurors,” Borger said. “Also, the anti-corporate sentiment in society plays into social inflation. Just look at the tactics [plaintiff’s attorneys] use in their advertising … where it’s just a few words on a billboard: ‘$15 million settlement.’ That’s desensitizing future jurors.”
Barbara Gliszczynkski, the vice president of risk management for Westgate Resorts, took it a step further and blamed the influence of social media for the increase in nuclear verdicts.
“We had these big verdicts 20 years ago, but the majority of the public was not aware of it,” Gliszczynkski said. “Now social media is bringing it to the forefront. Folks who were not interested in these types of litigation are now pursuing them because they’re aware of the potential for a substantial verdict.”
Steve Carr, a claims litigation manager for Grange Insurance, suggested that one way to thwart nuclear verdicts is for defense litigators to steal a page from their opponent’s playbook.
“Defense attorneys tend to be very reactive when complaints are filed,” Carr said. “It’s a reactive business, and we sometimes get caught in that rut of, ‘This is the way we do it; this is the way we’ve always done it.’ So we don’t [often] stop, put aside our defense hats and think like a plaintiffs’ attorney and come up with a strategy and tactics to defang those efforts.”
Another critical subject the panel addressed was the dearth of next-generation litigators who have the desire and ability to work on the insurance industry’s side of the ball.
Carr’s advice for attacking this particular dilemma was a direct message to insurance company CEOs: Stop being paralyzed by the possibility of being on the wrong end of a costly judgment.
“We’ve become so risk-averse on the claims side and so afraid that we’re going to get hit with one of those nuclear verdicts that we don’t try the cases that we should try,” Carr said. “And without trying those cases, we aren’t training the next generation of our defense bar.”
Matt Jacob is a Las Vegas-area freelance journalist.
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