Insurance policy underwriters and litigators in securities class actions place importance on the total amount of coverage, but also focus on where their coverage stands in the insurance tower. In the event of a securities class action, predicted settlement analysis estimates the total expected payout in the event of a settlement. However, each insurer’s placement in the tower of coverage is crucial to understanding what the predicted settlement means for them. A given expected settlement can imply either a near-certain full payout on a policy underwritten by an insurer or a probability of any payout close to zero. In this NERA paper, Senior Vice President Dr. Patrick Conroy and Senior Consultant Dr. Jordan Milev discuss a new tool called Coverage Tower Analysis. The tool is based on NERA’s predicted settlement model and quantifies the underwriter’s expected payout and incentives driven by the probabilities that a settlement will fall in a specific tier of the insurance tower.