Litigation Abuse, Regulation, Hard Market Among Insurance Trades’ Priorities for 2024

Insurance trade organizations are always working for the industry so Insurance Journal asked them: What are the top priorities and/or challenges heading into 2024?

Here are the responses we received:

In the coming year, the American Property Casualty Insurance Association (APCIA) will focus on proactively engaging in nine priority areas, in addition to tackling the day-to-day challenges facing the property/casualty insurance industry. Foremost among those priority areas is working to curb rampant legal system abuse, in coordination with the broader business community. The abuses of our judicial system by the plaintiffs’ bar and their allies are wide-ranging, impacting insurance affordability and availability in many states, as well as the ability of businesses to remain viable.

Other priority areas include:

• supporting risk-based pricing and related rating and underwriting tools;
• addressing innovation, regulatory modernization, insurance industry talent and economic empowerment;
• catastrophe insurance challenges (including adoption of relevant recommendations from the federal Wildland Fire Mitigation & Management Commission Report);
• ensuring the sustainability and soundness of the state-based workers compensation system;
• protecting insurance contract certainty against legislative, regulatory, or judicial overreach;
• addressing automobile insurance cost drivers;
• preserving a sound taxation structure for property-casualty insurance; and
• advancing international trade, market access, and regulatory modernization.

APCIA will also address important issues that cut across multiple priority areas, including opposing arbitrary and prescriptive pro- and anti-ESG mandates that inhibit insurers from carrying out the business of insurance, addressing false narratives perpetrated about the industry, and identifying government intrusion risk that threatens the insurance affordability and availability to consumers.”

– Stef Zielezienski, APCIA executive vice president and chief legal officer

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According to recent reports from AM Best and the 15 states with surplus lines stamping office, we anticipate growth of the wholesale, specialty and surplus lines market to continue in 2024. For the Wholesale & Specialty Insurance Association, that presents an ongoing opportunity to promote the value of the wholesale distribution system to retail agents.

WSIA members can craft customized solutions, at no additional cost to the insured, that are tailored to each risk. With this growth, there is also enhanced need to develop the industry’s talent pipeline to attract new professionals, particularly those from diverse backgrounds, to careers in this segment of insurance to meet growing needs.

– Brady Kelley, WSIA Executive Director

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Educating the public about how climate risks and legal system abuse are impacting the affordability and availability of coverage will remain an Insurance Information Institute (Triple-I) priority in 2024. Since the 1980’s, U.S. insured losses due to natural disasters are up tenfold. Triple-I’s challenge is to drive behavioral changes so people and communities better manage risk and become more resilient, thereby reducing insured losses by predicting and preventing them.

We also will continue to influence the policy debate about legal system abuse in 2024 given Triple-I’s success last year in explaining its role in driving up coverage costs.

– Sean Kevelighan, CEO, Insurance Information Institute

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For the Independent Insurance Agents & Brokers of America (Big “I”), helping our members navigate the unprecedented hard market in 2024 is the major priority. It’s a multifaceted, complicated problem, so we are supporting our independent agents and brokers in various ways. We’ll do that by expanding Big “I” Markets, our market access program, to give members more options for their clients; providing resources for members through our Trusted Choice Hard Market Toolkit and launching a companion, consumer-focused education campaign; and continuing conversations with carriers and state and federal policymakers on the impact of the hard market. The only way out of this will be with creative input from all stakeholders that puts policyholders first and expands viable coverage options. The hard market challenge also brings great opportunity for independent agencies because we can access multiple markets, so we will highlight the strength of the channel and what sets it apart from competitors.

– Charles Symington, president & CEO, the Big “I”

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The National Association of Mutual Insurance Companies’ (NAMIC) concern in Washington runs along the theme of the federal government looking to insert itself into the business and regulation of insurance, seemingly without concern for the consequences.

Lawmakers are grappling with emerging technology and how the government should address the risks it presents, including the potential for a cyber-insurance backstop that carries the potential to distort a growing insurance marketplace. We’ve seen similar calls for federal intervention amid the confluence of different economic and demographic shifts that have ushered in a new era of risk for consumers and insurers alike.

Additionally, the administration is continuing to press against the state insurance regulatory system through the Federal Insurance Office’s impending data call. That will create millions in annual compliance costs for companies by the FIO’s own admission.

On a more positive note, though, NAMIC continues to see positive engagement and significant progress in our efforts to focus federal disaster policy on preventing losses from extreme weather or wildfires. This includes continued growth in federal funding for state and local mitigation projects.

– Jimi Grande, senior vice president of federal and political affairs for NAMIC

Insurers and policyholders face a new era of risk with the combined effects of extreme weather, inflation and economic pressures, litigation abuse, and rising reinsurance costs. State officials are best positioned to tailor regulatory solutions to their marketplace and consumers, such as improving resiliency to severe weather and setting up guardrails against litigation abuse.

The 2023 legal system reforms in Florida should begin to improve one of the country’s most troubled markets. NAMIC will seek opportunities to export that progress to other states. We also continue to support protections for consumers that avoid unnecessary costs, like model acts to regulate public adjusters and those who prey on catastrophe victims.

Finally, NAMIC will closely scrutinize and as necessary oppose state efforts to attempt artificially restrict how insurance rates are set. Ultimately, a sustainable and fair insurance system must allow rates to match risk.

– Jon Schnautz, assistant vice president of state affairs for NAMIC

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At its core, reinsurance helps to ensure economic stability. Given the meteoric rise in insured losses in recent years resulting from catastrophic events in the U.S., reinsurance has served taxpayers well to stabilize the market, ensure economic stability, and encourage a healthy and robust (re)insurance marketplace. The Reinsurance Association of America (RAA) will continue to work with state and federal legislators to ensure markets are not disrupted by legislation that works at opposition to a free and open marketplace and that communities at risk to extreme events have additional resources to mitigate their exposure. To that end, the RAA will focus on the following priorities in 2024:

• Promote tax incentives for property owners, communities, and investors to improve resilience.
• Address federal and state legislation that seeks to improve distressed insurance markets in high-risk wind, wildfire, and flood areas.
• Defeat legislative efforts to unwind Florida litigation reforms.
• Preserve underwriting or investment freedom at risk to prescriptive legislation and regulation.
• Explore with industry and business partners whether a public program to address catastrophic cyber risks is warranted.
• Pursue legal system abuse reforms which adds costs to claim resolution, or which masks the true parties with an interest in disputed claims.

Working with our partners in the Administration, Congress, state legislatures and the private sector, the RAA will promote, defend, and protect the value proposition of reinsurance.

– Barb Carroll, membership and communications, RAA

Topics Lawsuits Legislation Pricing Trends Market