Insurance

Property Casualty Insurance

Property casualty insurers are affected by market dynamics and catastrophic events that are often followed by increased regulatory scrutiny and litigation. The property casualty insurance cycle results in periodic episodes of rapidly rising prices and declining insurance availability, where particular lines of insurance such as product liability or medical malpractice might be particularly affected. Large catastrophic events like hurricanes, fires, and earthquakes can result in widespread damage and challenging conditions for policyholders, claims adjusters, and insurers. Increased litigation, including class action lawsuits, often accompanies such events along with increased scrutiny from regulators and legislators.

Since an insurer typically receives the revenue upfront but pays the claims later, insurers record an estimate of future expected claims known as loss reserves. Loss reserves are insurers' largest liability and adjustments to the loss reserve can have substantial impact on an insurer's value. Litigation between the insurers and their shareholders can arise involving the timing of loss reserve adjustments.

Some types of property casualty insurance have their own particular features that require additional expertise. For example, directors' and officers' (D&O) insurance is affected by shareholder litigation, product liability insurance involving asbestos and other products can result in mass torts claims, private passenger automobile insurers' use of credit ratings is controversial, and worker's compensation insurance involves long-tailed medical risks. The issues relating to specific lines of insurance and financial reporting can result in disputes between the insurer and regulator, the insurer and policyholders, or the insurer and its shareholders.

NERA's insurance experts combine deep industry knowledge with expertise in economics, finance, statistics, and accounting to address a variety of litigation, regulatory, and advisory issues involving the property casualty industry.