Aspen Insurance Head of U.S. Excess Casualty, Richard Wagner, Discusses Growth in E&S Casualty Amid Nuclear Verdicts

In an exclusive interview published by Insurance Business America, on record growth in the U.S. excess and surplus (E&S) casualty market, Richard Wagner, Aspen Insurance Head of U.S. Excess Casualty, believes that this current pace can be sustainable, but only if carriers are able to withstand the pressure of runaway settlements and costs related to nuclear verdicts.

Growth in this space has been facilitated by the current tort litigation environment, specifically resulting from nuclear verdicts (verdicts of $10 million and above), social inflation and third-party funding. As loss costs have increased, insureds that previously fit into the admitted market have found it increasingly difficult to find coverage and have turned to E&S casualty non-admitted market.

Richard noted that while this has created opportunity and expansion, the market’s long-term outlook could change if outsized jury awards continue. “A high-profile default in the E&S space could cause insureds to retreat to the admitted market,” Richard said.

Policy makers are beginning to demand reforms that will help keep the value of claims reasonable and commensurate with the actual harm or loss to the plaintiff. But there is more that the industry could and should be doing.

For instance, the insurance industry needs to do a better job educating the public on the true costs of decisions they may make as jurors.

Richard said: “Late night TV is full of ads for the plaintiff’s bar, but there are no ads from our industry explaining how nuclear verdicts that are untethered from the true value of the plaintiff’s loss are adversely impacting their household budgets from auto insurance and rent to the cost of most all goods and services.”

Read the full Insurance Business America interview here.

I’m hopeful we are reaching a tipping point where the general public and policymakers are beginning to demand reforms that will help keep the value of claims reasonable and commensurate with actual harm.

Richard Wagner Aspen Insurance Head of U.S. Excess Casualty