Social inflation is a big issue for insurers, especially in the US where plaintiffs’ lawyers are demanding ever-larger pay-outs, backed by juries who are increasingly inclined to back David against Goliath. But the right approach will reduce this trend, as Rick Lindsey, CEO of Prime Insurance Company, tells Intelligent Insurer.
What if social inflation is being caused not by a litigious society with a distrust of big corporations but by slack underwriting and flimsy claims defences?
Rick Lindsey, chief executive officer of Prime Insurance Company, says Prime has bucked the trend of rising pay-outs with a combination of meticulous underwriting and robust claims defence.
The most important point is that before Prime agrees to write a risk, a meeting must take place between the chief underwriter, the producer and the insured, ensuring total transparency. The aim is to establish what the contract is trying to accomplish, the risks, and what the background and the situation are.
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