Two consumer groups are repeating charges largely made earlier in a 2020 report, accusing commercial insurers of wrongly blaming social inflation for the “massive” premium increases they charge.
A spokesman for the Insurance Information Institute said in a statement that the organizations are wrong to claim there is no link between litigation and insurance costs.
In March 2020, the Washington, DC-based Consumer Federation of America and the Center for Justice & Democracy at New York Law School said in a report that the insurance industry had created a “false” crisis allegedly generated by high jury awards, even though it had a record surplus . The report was then criticized by insurance organizations.
The latest report, which often cites the earlier one, says: “As part of their narrative, industry leaders are publicly expressing the view that the industry is financially beleaguered and unable to pay claims without significant rate increases.”
;“It’s a story that’s being used not only to drive a cycle reversal, but also to sustain interest rate hikes throughout a tough three-to-four-year market, which we’re still in but nearing the end of today,” it states.
III responded in a statement, “Anyone who believes there is no correlation between litigation and insurance costs should examine either Florida’s homeowner’s insurance market or the inflated claims payouts incurred by U.S. commercial auto insurers over the past decade.”
Discussing the commercial auto market, the statement said III and the Casualty Actuarial Society “found that U.S. commercial auto insurers paid out $30 billion more than would otherwise be expected going back to the early 2010s, in part due to excessive litigation and extraordinary expensive jury verdicts.”
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