Best’s News & Research Service - September 07, 2018 09:01 AM (EDT)
A.M. BestTV: Risks Are Changing for Legal Professional Liability Insurers, Say A.M. Best Analysts
- September 07, 2018 09:01 AM (EDT)
Oldwick //BestWire// - In this A.M.BestTV episode, Janet Hernandez, senior financial analyst and David Blades, senior industry analyst, both of A.M. Best, examine a recent special report focused on smaller and midsize insurers that have developed a market in serving smaller law firms and solo practitioners. Click onhttp://www.ambest.com/v.asp?v=legalliability718 to view the entire program.
Insurers covering small law firms and solo legal practitioners have enjoyed a favorable run over the last several years, quite different from the period between 2008 and 2011, when there was an uptick in litigation against law firms.
“2010 was a turning point and pivotal year,” said Hernandez. “The financial and credit crises and the burst of the housing bubble, all caused an uptick in legal malpractice lawsuits. This, in turn, caused an uptick in the combined ratio prior to 2010. 2010 is the start of normalization of these claims in terms of frequency.”
Blades highlighted what is causing a drag on current profitability among market participants.
“In the last few years, claims frequency of legal professional liability insurers has basically stabilized; however, claims severity has increased,” said Blades. “This is basically tied into claims defense costs. We have seen claims remaining open for a longer period because plaintiffs are resisting offers of settlements. This resistance is definitely pressuring insurers,” he said.
To access a copy of this market segment report, titled, “Legal Professional Liability Insurers Address Changing Claim Trends, Emerging Risks,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=276016 .
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