The U.S. insurance industry is facing one of its most significant challenges to date: the National P&C Litigation Crisis. What began as rising insurance costs fueled by economic and social inflation has exploded into an uncontrollable situation. Lawsuit abuse, nuclear verdicts, and the rapid growth of litigation funding have turned the courtroom into a battlefield for profits, with insurers struggling to keep up.
Florida has already felt the brunt of this storm. The state became ground zero for litigation, as insurers were forced to navigate a flood of claims that threatened their solvency. Plaintiffs' attorneys dominated the scene, while insurance defense teams found themselves overwhelmed.
The national crisis is here, but within this crisis lies an opportunity.
Florida may have faced this storm first, but it also paved the way for a solution. Their journey taught us that waiting for government action is risky and that relying on external reforms can sometimes lead to overregulation. Instead, insurers must act now and take control of their destiny.
1. Shift from Litigation Management to Litigation Resolution
Rather than reacting to lawsuits, insurers must adopt a litigation resolution approach—prioritizing early settlements, aggressive negotiation, and minimizing time in court. Florida's insurers successfully shifted focus, showing that efficient resolution strategies reduce costs and improve outcomes.
2. Advocate for Targeted Reforms
Insurers must push for legislative reforms that address the root causes of litigation abuse, including:
Limiting bad faith claims to genuine misconduct.
Capping non-economic damages to curb nuclear verdicts.
Increasing transparency in litigation funding to reveal financial interests that drive lawsuits.
Florida’s insurers demonstrated the need for reform by gathering and presenting data, leading to the passage of HB 837—a major step in tort reform.
3. Leverage Data for Proactive Strategies
Using litigation data to track claim trends and outcomes, insurers can build more effective litigation strategies and advocate for data-driven reforms. Florida's success began with data, enabling them to act before litigation costs spiraled out of control.
4. Empower Litigation Teams
Equip litigation teams with the right tools:
Early case evaluation software to assess risks and settlements.
AI-powered legal research platforms for faster insights.
Specialized training in pre-suit settlements, bad faith litigation, and nuclear verdict mitigation.
By investing in these resources, insurers can move from defense to offense, tackling litigation proactively.
5. Take Responsibility and Lead
Insurers must acknowledge the crisis and take responsibility, just as Florida did. Waiting for government intervention is risky. Instead, the industry should lead reform efforts, using data and action to push for meaningful change.
The National P&C Litigation Crisis is not just a short-term problem; it’s a systemic issue that will require bold action, targeted reforms, and a shift from litigation management to litigation resolution. By empowering teams, leveraging data, and leading the charge on reform, insurers can turn the tide and emerge stronger than ever.
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Wesley Todd
CEO, CaseGlide
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