White Paper

Long-Tail Casualty Claims Are Emerging. What Insurers Need to Watch For

Since the end of 2022, long-tail claims have been revving up. But the right reinsurer with the right people on board can help make a difference for any ceding company.

White Paper Summary

To say the effects of the COVID-19 pandemic continue to be felt would be an understatement. From health and wellbeing to travel, economics, the supply chain and more, we’re still in the midst of understanding the far reach of this global disruption.

In the insurance world, one of the biggest casualty trends we see is the increased emergence of long-tail claims following this pandemic.

“It began at the end of 2022 into 2023, but Munich Re US, for example, has really started to see a higher volume of claims submissions,” said Maura Freiwald, head of casualty, Munich Re US.

“Utilizing our expert resources to constantly monitor our portfolios, and new developments, we compared received submission from the first half of- 2022 to those same accounts in the first half- 2023 to understand the emergence,” said Freiwald. “Our analysis showed that on average the total incurred YOY went up by 31%. This is significantly higher than what we were expecting driven by new losses and development of existing losses.”

This analysis highlighted the fact that the emergence is not just for the latest years but in some instance it dates back to policies as far back as 2012.

It’s not just COVID that’s contributing to this spike, she said, although it has definitely played a role: “It’s part of the COVID catch-up, because the courts were closed. But there’s also this question mark around, are more claims coming in that we just didn’t know about? Or perhaps, they’re coming in at higher volumes than we anticipated.”

Whatever the case may be, long-tail claims are making their way into the courts, and the need for casualty solutions to manage them is paramount. As the trend continues upward, here are several things that underwriters need to keep in mind — including what to look for in a partner when it comes to addressing these types of claims.

To learn more about Munich Re, please visit their website.

Munich Re, and its family of companies, has been a leader in risk for more than 100 years. We are spearheading innovation to deliver competitive advantages for our clients every day and disrupting on our own terms to reimagine the world of risk itself. Munich Re Specialty is a description for the insurance business operations of affiliated companies in the Munich Re Group that share a common directive to offer and deliver specialty property and casualty insurance products and services.

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