X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

As all claim executives know, much of the real work comes long after insurance policies are sold and the brokers’ celebratory signing lunches have faded from memory. The ultimate test of how well policies were underwritten — and how profitable any given book of business will be — is not only the number and nature of the claims handled under those policies but also the management of those claims and their related expenses.

Insurance companies and claim personnel are accustomed to “incurred but not reported” (IBNR) liabilities arising from injuries that occurred in the past but were slow to result in claims. These are often called “long-tail” liabilities or claims and can be addressed in the same manner as more immediate “short-tail” claims. That is to say, an insurer can resolve long-tail claims as they actually appear in the tort system over time through litigation and/or settlement, which is something of a traditional insurer response. The elongated time horizon of long-tail liabilities, however, offers other opportunities to resolve, contain, or diminish costs via alternative efforts undertaken before the claims actually come into being and are filed in the tort system. Such advance efforts to contain liabilities is referred to as “ring-fencing.”

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

 

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.