FOREWORD
Professional liability: a special report on marketplace trends
In this publication, Markel’s subject matter experts review some significant risk trends their clients are encountering, and the ways providers such as Markel are responding, says the firm’s Jim Proferes, global executive underwriting officer for Professional Liability.
In today’s rapidly changing economic and social environment, businesses that pursue new areas of opportunity frequently need to assess and address the added risk exposures that potentially come with that opportunity, including exposures specifically related to professional liability.
In addition, business pressures related to professional liability are rising for all types of enterprises, ranging from a challenging economic climate and growing regulatory pressures to the advent of revolutionary new technologies.
As a leader in specialty insurance, with more than four decades of providing professional liability solutions, Markel is experienced in providing insureds with a wide range of coverage in this sector, including directors and officers (D&O), errors and omissions, transactional risk, employment practices liability, and more. These solutions are continuing to evolve on an almost daily basis.
The breadth and complexity of coverage in this space is dynamic. What may be helpful as a start is a review by several of Markel’s subject matter experts of some of the most significant risk trends they believe their clients are encountering, and the ways insurance providers such as Markel are responding.
“The breadth and complexity of coverage in this space is dynamic.”
Jim Proferes, Markel
The challenges and opportunities of tech
Josh Brown, head of Technology Professional Indemnity at Markel International, is well-positioned to comment on the opportunities and challenges caused by the explosion of interest in artificial intelligence (AI), including generative AI. The companies driving these advances are facing a range of potential challenges, including increased scrutiny from regulators and other governmental authorities, as well as competition from other technology leaders. Major data concerns are arising, including data quality, security and privacy, as well as each organisation’s own talent sufficiency and technical competency.
“All three types of professional firms are experiencing an increase in the frequency and potential severity of litigation.”
Growing exposures for professional firms
Jessica Cardoso, Markel Bermuda’s head of office and leader of Risk Management Errors and Omissions underwriting, is well positioned to comment on the increased exposures being faced by professional firms. These include such challenges as the increased costs of settlements for law firms, the increased scrutiny consulting firms face over accepting controversial clients or matters, and the constantly changing regulatory demands being encountered by accounting firms.
In addition, all three types of professional firms are experiencing an increase in the frequency and potential severity of litigation involving alleged discrimination, harassment or wrongful termination related to employment decisions.
Fintech challenges
Martin McCarron, director of Financial Institutions and Management Liability for Markel’s International division, addresses the specific challenges faced by companies in the flourishing fintech sector. Companies in this sector have been viewed as alternatives to traditional banking, offering efficiencies, improved pricing and increased availability.
However, in their drive for growth, they are increasingly encountering funding challenges, which can lead to insolvencies or in some cases increased reliance on mergers and acquisitions—all of which come with their own set of risks.
Increased pressures on D&O offerings
Sandra Soares, the leader of the Professional Liability team in Markel’s Bermuda office, has witnessed the impact of an extraordinary confluence of factors on traditional D&O offerings. Financial factors include a challenging economic environment, with more limited access to capital markets and an increased risk of insolvency. At the same time, insureds are facing unprecedented levels of challenge from disparate external sources, ranging from cyber attacks and regulatory investigations to class action lawsuits.
For insurance providers such as Markel who seek to develop insurance solutions to challenges like these, a full range of capabilities come into play, including excellence in broker relations, claims handling, underwriting experience, product quality and risk solution services. Another key consideration is the carrier’s financial stability and longevity.
The common denominator in helping insureds cope with such issues is a commitment to engage in meaningful, solutions-focused dialogue with insureds and their marketplace advisors and representatives.
Jim Proferes is global executive underwriting officer for Professional Liability at Markel. He can be contacted at [email protected]
Image from Shutterstock / Everett Collection
