Hard market drives claims litigation
Following any major loss event, policyholders depend on cash flow to manage through the post-event crisis, allowing the insurers to use the leverage of withholding payment to drive down settlements.
Bruce Hepburn, chief executive of Mactavish, said: “Insurers don’t just react to a hard market by hiking rates, they also clamp down on claims. In today’s prolonged hard market, insurers don’t care about market share, they care about protecting their balance sheets. This is why premiums go up and insurers start to look for ways to reject claims.”
”Too many insurance companies are not fulfilling their primary function, the swift and fair settlement of insurance claims. This is a shattering indictment of the industry as a whole. If the industry is not paying claims as it should, what purpose does it serve?”