At one of the early meetings of American Legal Connections, Rich Henderson, a senior vice president for reinsurer TransRe, bumped into a concerned client from a hospital insurance company who brought his team members to the event.
The insurer was trying to get up to speed on the litigation landscape as it faced the near-term prospect of bringing a really big case to trial, reported Henderson, who co-chairs ALC, a group of claims professionals, defense lawyers and health care system executives—people that Henderson refers to as boots-on-the-ground fighters of social inflation trends.
Read more about ALC: Defense Lawyer’s Perspective: Connecting Insurers, Promoting Plaintiff-Style Solidarity
“Who else is involved in the [medical malpractice] case with you?” Henderson recalled asking the company representative, who revealed the name of another carrier providing insurance to a co-defendant. “They’re in the room,” Henderson advised, also going on to reveal that claims professionals from an excess insurer were sitting at the next table.
“Just in that space, they were able to put together a cohesive plan face to face. [And] at the end of the day, the claim ended up settling for [an amount] everybody was happy with.” On top of that, they came together on a discussion of life care plans, a key component of the economic damages portion of the case’s value—and they ended up hiring one of the attorneys who was presenting on that topic at the event.
“It was a win-win times four probably because everybody came to realize there was a path forward and to be on the same page, and barriers were broken down which otherwise would have stood in the way,” he said.
That’s not what usually happens.
The day-to-day evolution of liability settlements is all too often characterized by infighting between insurance tower participants, a scenario that plaintiffs lawyers bank on to push higher settlement values for cases beyond the med mal cases that Henderson specializes in, casualty insurance and reinsurance professionals told Carrier Management.
“The greatest thing they can do is try and divide and conquer against insurers,” said Tony Rai, chief claims officer of Aspen, during a recent interview, referring to plaintiffs lawyers and underscoring an idea he first presented in an article he wrote for Carrier Management in 2023, “Insurers, Insureds Must Collaborate to Get Ahead on Social Inflation.“
Aspen sees social inflation from several perspectives—primary insurer, excess insurer and reinsurer. In his article, Rai urged upper-layer tower participants in liability placements to resist issuing “hammer” letters to the layers below trying to force settlements in those lower layers—even when the settlement dollars demanded are unreasonably high relative to