The Hartford’s Tooker: Casualty balance of power 'out of whack'

By Chris Munro

March 6 - (The Insurer) - Legal system abuse has “gone way too far” and shifted the balance of power away from insurers although customers are in fact the ones ultimately suffering, and society must work together to rectify the situation, according to The Hartford president Mo Tooker.

The executive, who was speaking during a keynote speech at the Zywave Casualty Insights Conference in New York on Thursday morning, said the frequency of casualty claims “has been relatively benign”, and “maybe negative for certain industries”.

However, the casualty insurance market “has a severity problem that’s going the roof”.

Indeed, as Tooker noted, median case awards for plaintiff verdicts have steadily increased since 2020.

A major driver of the severity is legal system abuse, and Tooker declared that in the casualty space “the balance of power has shifted too far”.

“This is not about broker versus carrier… But I do think this thing called legal system abuse has gone way too far and ultimately the customer is suffering,” Tooker said.

“The customer isn't winning on this. Ultimately, the plaintiff attorney is the one who's winning here and is taking off more than her share or his share,” he added.

The Hartford executive said ultimately everyone – carriers, businesses and consumers – is paying the price of what he described as a “tax”.

During his speech, Tooker highlighted how the casualty market has been impacted by the rise of plaintiff attorney firms “chasing ambulances” and the financial support provided by the fast-growing litigation financing industry.

“The balance of power has just gotten way out of whack, which means that plaintiff attorneys are taking far more than their share, and ultimately the customer loses, and that tax on society is impacting all of us,” he said.

“The customer, whether that be a personal lines customer or a business customer, is losing out,” Tooker said.

BRIGHT SPOTS

The Hartford executive said there are some “bright spots” for the industry, “but it’s going to require us to work together”.

“We do think the advancement of technology – AI, sensors in general – is just going to be a place where we can work together as an industry to help our customers have a different outcome,” said Tooker.

“We do believe that we can bring our customers risk management techniques that ultimately reduce their risk.”

Tooker made clear that The Hartford, like many other carriers, has every intention to pay out on fair claims.

“That’s what we’re in the business for: to pay claims. We’re going to pay our fair share.”

But he called on the industry to work together to try and get a handle on the issues impacting the casualty market.

“I think it needs a collective effort from us across society, certainly with an extra part from the industry, (to rectify it),” Tooker said.

One of the key issues is trying to improve the industry’s standing in society.

“We feel when we do research with our customers, we get a pretty high level of trust in the agent and broker. It’s much less for the carriers.”

In terms of trust scores by industry, Tooker said insurance ranks just above the federal government: “not the greatest place."

“This is a massive challenge for us,” he said.

Tooker said The Hartford is focused intently on improving the trust dynamic between the insurance industry and customers.

“This is not new, but every interaction with our customer is going to either build trust or lose trust,” he said.

“How do we consistently build trust with insurance companies into society? This is a tough one right now, because often after events, we are the piñata.

“And I think it's incumbent on all of us to have that customer focus to make sure that we are being fair and working through all this.”

Tooker called on brokers and agents to do their part to improve customers’ views of carriers.

“In many of your techniques, when you're negotiating, you treat insurance companies like piñatas in front of your customers. It doesn't help us.

“So I need the respect from all of you. You give us a hard time about not being fair with your customer, but also I think this is an industry challenge to build trust in the industry.

“And so I'm asking that everybody, including the insurance carriers, brokers and agents, try to make that happen for us,” Tooker said.

He urged the market to be respectful about each other, and very intentional about how the industry is represented in front of customers.

“This is an eroding landscape, and that's really dangerous for all of us,” he said.