The latest Artemis live video interview from Reinsurance News’ insurance-linked securities (ILS) focused sister publication, delves into the world of technology enabled claims instigation, which the Co-founders of 4WARN Inc. explained is resulting in both higher claims and litigation.
In recent years, claims frequency has become increasingly harder to predict for insurance companies in certain lines of business, which in turn impacts their reinsurance counterparts, as claims inflation and loss amplification trends have become more and more difficult to manage.
For many, Florida and the issues with litigation will immediately come front of mind, but this is starting to become a more meaningful problem in other parts of the U.S. well.
In this fascinating interview, Artemis spoke with Joe Petrelli, President and Co-founder of Demotech and Co-founder of 4WARN, and Todd Kozikowski, Co-Founder and shareholder of 4WARN, a new venture aiming to provide awareness of tech-enabled claims instigation.
According to Petrelli and Kozikowski, this includes the convergence of litigation funding, marketing, financing, and search engine optimization to initiate insurance claims, notably after a catastrophic event but also in areas such as casualty and beyond, where these methods are used to inflate claims litigation.
The pair started researching the trends in March 2022, beginning with preliminary explorations of a number of smaller, regional Florida-focused carriers, given that the region experiences disproportionate property litigation levels.
The findings from their work highlight a glaring but lesser known and understood driver of the lack of control insurers appear to have of their claim frequency.
Part of 4WARNS’s mission is to help insurers address claims instigation, but also to prepare themselves for and be able to defend against the trends discussed in the interview by establishing strategies.
The full video interview is embedded below and can also be viewed in full, along with previous Artemis Live video interviews, over on the Artemis YouTube channel.