Class actions among fastest rising liability exposures

Class actions are on the rise in the UK, Europe and elsewhere, as growing litigation funding reduces the barriers for consumers seeking collective redress. It is one of five major liability trends for corporates and insurers already under pressure from the ongoing coronavirus pandemic and an uncertain economic outlook.

Analysis shows defective products as the top cause of liability claims over past five years, with the most costly recalls emanating from the automotive and food industries in England, Wales and the US. The disruptive impact of civil unrest and environmental concerns such as indoor air quality and higher fines and remediation standards also produce their own wide-ranging exposures, according to a new report from Allianz Global Corporate & Specialty.

“Pricing in the liability insurance market may have turned in recent months, however social inflation trends and large court verdicts continue in the United States. This combined with expanded exposures for non-US companies doing business in the US and an increase in automotive part recalls are putting pressure on liability insurers,” says Ciara Brady, global head of liability at AGCS. “Overlay this with the uncertain economic outlook, political instability and unknown impacts from coronavirus and this is creating a challenging market for clients, brokers and insurers alike."

See the next issue of CIR Magazine for more on group litigation risk, particularly in relation to COVID-19.

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