April 27, 2018 09:45
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Insurance products professional liability for officers and directors resulted in losses for u.s. insurers by 2017, according to a report from the firm of rating A.M. Best.
The ratio of the costs of defense and control of these fonts is passed to the 77.2% in 2017, against 65.6 percent in 2016, the report said. The latter specifies that such losses are caused by an increase in the number of claims.
According to the firm, the deterioration of 11.6 points on this type of product is the largest experienced by the insurance industry of damage in the u.s. since 2011. It is also the largest loss ratio reported for the same year.
More and more lawsuits
The increase in the number of complaints is primarily attributed to an increase of class actions in the United States for 2017, reports A.M. Best. According to the Securities Class Action Clearinghouse, a record number of 412 cases were filed as class actions in 2017. This figure represents an increase of 52 % compared to 2016.
Although the average amounts of the class actions have decreased considerably, from 72 million us dollars (US$ M) in 2016 to$ 18.2 MILLION US in 2017, the increase in the number of disputes will have a greater impact on the financial results of companies, ” says A.M. Best.
Profitability will continue to decrease
Despite the rise in claims, the cost of premiums is significantly remained the same since 2014. According to a study by market conditions 2018 of the brokerage firm Arthur J. Gallagher, most insurers have chosen not to change their premiums, although they have incurred losses in 2017.
Always according to the firm, as long as the competition makes it difficult for companies to implement increases, the profitability of the insurance policies for professional liability for directors and officers will continue to decrease.