Can you tell us about the trends you're seeing in the industry today?
It's been a really dynamic market here for the last several years as things have firmed up. It's been trying times for our clients and risk managers throughout all industries. It's more of the same — social inflation was the beginning of the challenges that the industry faced, and that continues to persist coming out of the Covid shutdowns. But what we have been starting to see the last several years is the plaintiffs bar really organizing around cases and it's become very clear that if you have a case with any bad facts, you want to get it settled, you don't want to end up in front of a jury. When it does end up in front of a jury, oftentimes, now you're seeing trends like litigation financing, where the plaintiff attorney will get some investment dollars behind them, and it really helps them, buoy them and get them through a lengthy process. It's continuation of the same but a little bit more evolution.
What do you think the industry should be doing to fight third-party litigation funding?
One of the things we would like to see is just more transparency around when there is litigation financing involved in a case. Oftentimes, we don't know that it's that it is a factor. There should be transparency into that. And also, the jury should be allowed to know that there is a financing arm helping the plaintiff get through the duration.
How about inflation? How is that impacting the industry?
Great question. I guess that's a new wrinkle to this market. It's been a difficult market for a number of reasons. But in the last six months, we've really seen inflation become problematic. And beginning with of supply chain challenges that that we've seen; it's made raw materials and parts hard to come by and expensive as a result. And so, we see show up in a couple of different places, it's cost to repair and replace on the auto side. So that's driving auto losses up on the physical damage side, and then you see it on the property side. This has been a really tough market from a property standpoint.
Rates have gone up meaningfully, as we see continue to see severe weather in severity in the weather increase. It used to be just hurricanes that we worried about from a severity standpoint, but now it's hail, it's winter weather, it's tornadoes, it's wildfires, and so customers clients are seeing as we our losses go up, and that's driving rates up.
The other piece is that cost to repair and replace that is driving when there isn't a loss. The losses now, we're seeing more severity in the losses than we had in the past. So clients are getting hit with pure rate, and we're also as an industry really pushing to make sure we have values correct and their property schedules are current from a replacement cost standpoint. And that's just another hit for our clients.
