Recovery Room- and lots of it

It is hard to forget that masterpiece of television advertising that branded a financial services company so effectively: “When EF Hutton talks…” was the slogan that launched thousands of investors on a path – pre-internet – to E F Hutton for financial and investing advice.

For me, as for many of our readers, there are resources to whom you listen with the greatest of interest given their experience and knowledge. I know a little bit  about subrogation- enough to avoid its complexities, yet to sustain an interest in it. So when my long time friend, Keith Minella, talks about subrogation I listen – and you should too. He is far and away the most creative thinker in that sphere, as sphere that suffers from redundancy. The precision and efficiency needed in subrogation causes it to be a cautious endeavor, maybe even a slower process than comparable undertakings. According to Keith, that’s about to change. His new venture. Legal Claims.AI™ has transformative potential, leveraging cutting-edge artificial intelligence to bridge critical gaps between insurance companies, healthcare providers, and the legal system. Born from the expertise of veterans in the insurance and healthcare verticals, his revolutionary platform addresses challenges that have long plagued each of the  sectors, Keith has set as his goal delivering a “system of truth.” While Legal Claims.AI™ was built to untangle the complexities of legal rights, insurance recoveries, and uncompensated care,  its AI-driven platform provides clients with instant access to their legal rights—rights that are often obscured by convoluted processes and data silos. Healthcare providers and insurers are empowered to recover funds they might otherwise miss. Seems that the stakes have never been higher. The U.S. healthcare system alone writes off billions annually in uncompensated care, while insurers grapple with unpaid claims and missed subrogation opportunities. Enter the Trump cabinet’s waste elimination goals …. and the “click” sound from Keith’s venture reverbs like the loud and resolute “click” from the famous doors of a Mercedes G 500.

Incorporating AI solutions like Legal Claims.AI™ should be at the top of every organization’s strategic plan. For the 4,000 acute care hospitals in the U.S. and the thousands of health, property, and casualty insurers, this is Elon  Musk level logic – well worth an undistracted listen.

Nick Pearson Receives IFNY Accord

Nick Pearso Receives IFNY AccordSome years back, Cecilia Norat introduced me to Nick Pearson as a prospective board member of the Insurance Federation of New York. He was a serious and direct a person as I had ever met. A top lawyer and influencer, Cecilia was very enthusiastic about him has she built her presidency that year.

Almost immediately, Nick began to host IFNY events at his offices, to the point where it became a kind of headquarters. Morning, meetings with featured speakers, cocktail receptions for legislators, and board meetings with the subject of his generosity and, before long his presidency and leadership of the group. During his tenure, the federation grew handsomely and added to its credits the Mary Lanning, public service award, the emerging leaders, initiative, and importantly, IFNY’s intern program started by Mary Lanning and brought forward through throughBHGH – Boys’ Hope, Girls’ Hope- up to the present day.

Nick Pearson has never lost his seriousness and dedication for these many years, so it was particularly pleasant for those of us at the annual luncheon to w watch him react to a surprise presentation toward the luncheons end naming him Chairman Emeritus.It was an accord most deserving for a man who made a great difference, not simply in the association he led, but in the future future careers of students in the inner city, seeking away forward and finding it, potentially, in the business of insurance. Bravo, Nick…. And thanks.

The elections are far behind us, it feels, but the impact has yet to be felt.May I share an excellent summarial look at the possible upshot of the Trump win.The article is from Business Insurance and was ably penned by Claire Wilkinson, Shane Dilworth and Gavin Souter for the magazine’s Nov 12, 2024 issue.

“The property/casualty and risk management sector will likely see changes following last week’s elections as new economic, fiscal and legislative policies are introduced at the federal and state levels. While tort reform advocates will continue to target state legislatures, experts say the election of Donald Trump as president and Republican control of at least the U.S. Senate and possibly the U.S. House of Representatives might open the possibility of changes at the federal level.

Mr. Trump’s fiscal policy will alleviate concerns about tax increases and likely lead to a stable environment for mergers and acquisitions, they say.

However, the prospective economic policy of the incoming Trump administration, particularly the introduction of additional tariffs, could increase insurers’ repair and rebuilding costs.

Tort reform 

The American Property Casualty Insurance Association will continue to push for federal legislation requiring the disclosure of third-party litigation funding following the election, David A. Sampson, president and CEO of the Des Plaines, Illinois-based organization, said in a statement.

For several years, insurers and corporations have raised concerns about third-party litigation funding, arguing that it drives up litigation costs and that the commercial interests behind the funding are often not required to disclose their involvement in lawsuits.

APCIA supports the proposed Litigation Transparency Act of 2024, which would require disclosure of third-party litigation funding in federal civil litigation; and the proposed The Protecting Our Courts from Foreign Manipulation Act, which would require disclosure of funding by foreigners and would prohibit funding by foreign states and sovereign wealth funds, Mr. Sampson said.

“Next year, APCIA will continue to build on the momentum from this Congress, educate new lawmakers on this priority issue, and work with the leaders in both parties to introduce and ultimately pass legislation,” he said.

APCIA will also continue its tort reform efforts at the state level, said Adam Shores, senior vice president, state government relations, in an interview. For example, the organization will look to build on reforms achieved in Georgia, Louisiana, and Texas in recent years “to further address legal system abuse,” he said.

Federal tort reform may not be a priority in Mr. Trump’s populist agenda, said Robert P. Hartwig, a professor of finance and director of the Center for Risk and Uncertainty Management at the Darla Moore School of Business at the University of South Carolina.

“The challenge for insurers in terms of tort reforms remains, with most reforms needing to occur at the state level,” he said. Mr. Trump’s judicial appointments could eventually affect liability insurers, including the directors and officers liability sector, experts said.

“The most likely way the new administration could impact the D&O environment is through the president’s judicial appointment powers,” said Kevin M. LaCroix, Beachwood, Ohio-based executive vice president of RT ProExec, a division of Ryan Specialty LLC.

Mr. LaCroix said the Biden administration’s judges were perceived as more liberal and more sympathetic to plaintiffs, whereas judges appointed by Trump will likely be perceived as more conservative and business-friendly.

“If, over time, there is evidence that the shift in the judiciary is favorable to defendant companies, it could affect pricing. Even then, supply and demand will be more important factors, as has always been the case,” he said.

Tariffs and taxes 

Increased tariffs on imports, which featured prominently among Mr. Trump’s campaign promises, could drive up costs for insurers paying for auto parts and construction materials, Mr. Hartwig said.

“From an auto and property insurance standpoint, the impact is unambiguously negative, at least from a claim severity perspective,” he said. Higher prices for replacement parts and building materials could eventually lead to higher premiums for policyholders, Mr. Hartwig said.

The environment for mergers and acquisitions within the insurance sector, though, will likely be stable, experts say. On the one hand, buyers will be more confident and hungrier to do deals because they won’t face a possible corporate income tax increase, leading to pro-growth policies, said Kevin Stipe, CEO of Reagan Consulting in Atlanta.

On the other hand, potential sellers among insurance agents and brokers are unlikely to see a capital gains increase, which would have had some of them “rushing to the exits,” he said. There will likely be fewer challenges associated with M&As under Mr. Trump, said Mr. Hartwig.

One major deal announced in 2020 – Aon PLC’s proposed acquisition of Willis Towers Watson PLC – was shelved during the Biden administration after the U.S. Department of Justice raised antitrust concerns.

“I would certainly expect that you will see on net more deals done, but with the caveat that if they involve a foreign partner, there could be some additional challenges, given the general concern about, say, foreign companies acquiring U.S. companies,” Mr. Hartwig said.

Other changes affecting commercial insurers and employers introduced during the Biden years will likely remain. For example, while Mr. Trump will likely change the chair of the Equal Employment Opportunity Commission, the EEOC’s Democratic majority will remain in place until 2026, so measures such as the Pregnant Workers Fairness Act, which went into effect last year, will stay in place, said Christopher DeGroff, a Chicago-based employment attorney at Seyfarth Shaw LLP.

Moreover, Republican appointee Andrea Lucas, the presumptive pick for the new acting chair of the commission, has expressed strong support for the PWFA, he said.

“I would expect the EEOC to continue its robust pursuit of pregnancy-related investigations and litigation in the foreseeable future, even with the change in administration,” Mr. DeGroff said.

A great start to what will be a watchful media’s assessment of the insurance impact of the President and the MAGA movement itself.

SA