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At one of the early meetings of American Legal Connections, Rich Henderson, a senior vice president for reinsurer TransRe, bumped into a concerned client from a hospital insurance company who brought his team members to the event.

The insurer was trying to get up to speed on the litigation landscape as it faced the near-term prospect of bringing a really big case to trial, reported Henderson, who co-chairs ALC, a group of claims professionals, defense lawyers and health care system executives—people that Henderson refers to as boots-on-the-ground fighters of social inflation trends.

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“Who else is involved in the [medical malpractice] case with you?” Henderson recalled asking the company representative, who revealed the name of another carrier providing insurance to a co-defendant. “They’re in the room,” Henderson advised, also going on to reveal that claims professionals from an excess insurer were sitting at the next table.

“Just in that space, they were able to put together a cohesive plan face to face. [And] at the end of the day, the claim ended up settling for [an amount] everybody was happy with.” On top of that, they came together on a discussion of life care plans, a key component of the economic damages portion of the case’s value—and they ended up hiring one of the attorneys who was presenting on that topic at the event.

“It was a win-win times four probably because everybody came to realize there was a path forward and to be on the same page, and barriers were broken down which otherwise would have stood in the way,” he said.

That’s not what usually happens.

The day-to-day evolution of liability settlements is all too often characterized by infighting between insurance tower participants, a scenario that plaintiffs lawyers bank on to push higher settlement values for cases beyond the med mal cases that Henderson specializes in, casualty insurance and reinsurance professionals told Carrier Management.

“The greatest thing they can do is try and divide and conquer against insurers,” said Tony Rai, chief claims officer of Aspen, during a recent interview, referring to plaintiffs lawyers and underscoring an idea he first presented in an article he wrote for Carrier Management in 2023, ““

Aspen sees social inflation from several perspectives—primary insurer, excess insurer and reinsurer. In his article, Rai urged upper-layer tower participants in liability placements to resist issuing “hammer” letters to the layers below trying to force settlements in those lower layers—even when the settlement dollars demanded are unreasonably high relative to injury or damage suffered. These letters, threatening to put lower-layer insurers on the hook for amounts above their policy limits as a consequence of rejecting demanded settlements, induce fear of taking cases to trial or negotiating with plaintiffs lawyers. This is “one critical factor that pushes up settlement value and drives social inflation,” Rai wrote.

Marc Wolin, president and chief executive officer of Seneca Insurance Company, a member of the Crum & Forster group, views the hammer letter threats of bad-faith claims tied to rejected settlements as an everyday event. While Seneca doesn’t write a lot of umbrella business, Wolin has a view of the broader landscape from his participation on the C&F Claims Counsel, a group of executives from across the enterprise that meet to review and assess large claims for the group. “If I’m 5X5, and I take [a case] to trial and it becomes 12 or 14, then I could be stuck with bad faith,” he said. “The downside is so upside-down that everybody pays” the ultimate price of escalating claims, Wolin said.

During a recent interview, Rai reported that in the months since CM published his article in late December last year, he’s seen a handful of instances where insurers are sticking to their guns, prepared to take claims to trial when they can’t get a fair settlement value out of the plaintiffs lawyers.

Still, those are isolated, he said. The overall situation “has not changed materially. We still have carriers that are very aggressive at trying to get things resolved below their layers, even though the value of that claim might be substantially less than is being offered…It’s below their layer. They want it resolved so that it doesn’t have any potential impact to them,” he said.

Getting on the Same Page

“What we really need to make sure that we do as an industry is properly value the claim,” Rai concluded. “The purpose behind insurance is to compensate someone for the loss that they’ve suffered. And it’s very hard to value certain losses,” Rai said. “How do you value a serious injury or wrongful death? How do you value someone’s life? But that’s unfortunately the part of the process that we have to go through…The core element is really trying to drive around how do we properly value the claim.”

From there, when carriers are all aligned—agreeing on what the value of that actually is— “we then need to make sure that we’re fighting the plaintiff’s attorneys to try and drive to that correct value,” Rai said.

“Collaboration needs to happen to make sure that we are driving to a compensatory value for the claim.”

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This is an excerpt of an article that was originally posted to Insurance Journal’s sister site, Carrier Management. To read the full article, visit

The article is of a three-part feature in which industry executives and a defense lawyer described industry best practices that could stem the tide of rising claims severity. Additional articles are:

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Topics Market