Insurance Business ReviewFebruary - March 20248THE VALUE OF SERVICE-LED CLAIMS IN A WORLD OF SOCIAL INFLATION AND NUCLEAR VERDICTSBy Beth Diamond, Group Head of Claims, BeazleyThere are numerous factors at play in today's claims landscape, from the impact of economic inflation to the volatility of social inflation. Clients are facing a complex and often unpredictable legal environment, and now more than ever, they need expert and experienced advisors who have seen similar scenarios before, and who truly understand these unpredictable situations. This kind of trusted partner is part of what organizations are buying when they select a specialty insurance provider.The current claims environment is creating some of the trickiest issues that businesses have had to face. A strong relationship with claims experts who can help navigate the terrain can influence outcomes, which is why having access to a client-IN MY OPINIONcentered claims team that is prepared to support their insureds through complex challenges like social inflation and nuclear verdicts is often a game changer.The impact of nuclear verdictsNuclear verdicts are a significant issue. We are seeing a sizable shift in the amounts that juries are awarding, particularly in cases that involve bodily injury or emotional harm. When you look, for example, at California jury verdicts on employment practices liability claims, the average verdict from 2018 to 2020 was $1.55 million. Post-pandemic that has risen to over $2.3 million on average.As a result of the change in the jury verdict universe, we are seeing the value of settlements increase as well. Plaintiffs' counsel knows that there is a concern about social inflation. They know that juries are willing to award these nuclear verdicts, and they are less willing to engage early in settlement discussions, holding out for much higher value settlements than we have seen historically pre-pandemic.Runaway nuclear verdicts create eye-catching headlines, but it is important to note that juries are still finding for defendants or awarding more reasonable amounts in the majority of cases being tried. These outcomes, however, garner much less media attention. Additionally, the Beth Diamond
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