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Allianz: Five Liability Loss Trends for Businesses in the Face of the Coronavirus Pandemic

Liability exposures for companies around the world are increasing. Factors such as rising litigation, collective redress and large court verdicts, costly and frequent recalls in the automotive and food sectors, the disruptive impact of civil unrest and riots in a growing number of countries, and environmental concerns such as indoor air quality and higher fines and remediation standards will likely impact businesses and their insurers in the future – all in the face of a challenging global pandemic, according to a new report from Allianz Global Corporate & Specialty (AGCS) which highlights five trends for the sector.

“Pricing in the liability insurance market may have turned in recent months, however social inflation trends and large court verdicts continue in the United States. This combined with expanded exposures for non-US companies doing business in the US and an increase in automotive part recalls are putting pressure on liability insurers,” says Ciara Brady, Global Head of Liability at AGCS. “Overlay this with the uncertain economic outlook, political instability and unknown impacts from coronavirus and this is creating a challenging market for clients, brokers and insurers alike. While we have to react to new loss trends in underwriting, AGCS remains committed to supporting our clients with solid risk transfer solutions and capacity to address today’s liability exposures.”

Social inflation in the US and rise of collective redress globally

Social inflation is a phenomenon especially prevalent in the US, driven by the growing emergence of litigation funders, higher jury awards, more liberal workers’ compensation claims, as well as new tort and negligence concepts. The median settlement amount of the top 50 US verdicts from 2014 to 2018 nearly doubled from $28mn to $54mn.

Litigation funding is not only on the rise in the US, but also in Europe and elsewhere around the world, contributing to a growing trend of collective redress as hurdles for consumers are lowered to embark on class actions. Countries that may not be historically associated with this development, such as Saudi Arabia and South Africa, are classified as being “medium risk” that a company may face a collective action in these jurisdictions, according to AGCS’ litigation funding country guide.

Another factor influencing the size of settlements in the US is the increasing sophistication of the plaintiff’s bar with specialist consultants and psychologists being deployed to influence the jury’s decision. The legal system in the US has seen a deterioration in consumer confidence towards corporations. This lack of confidence is driving an anger by individuals or classes of individuals toward perceived “greedy corporates” that is resulting in so-called “nuclear” verdicts.

According to AGCS experts, it’s too early to identify a reverse trend, but court closures due to the Covid-19 pandemic may slow down social inflation as plaintiffs realize that it could take years before their case is tried before a jury and therefore may be more willing to settle outside court.

Rising automotive repair and recall costs

In recent years there has been a growing number of recalls in the automotive industry in both the US and Europe. In the US, there were 966 safety recalls affecting well over 50 million vehicles in 2019 – more than two every day.

In many cases, components can be produced by one of a handful of suppliers that services the entire industry, which can make it prone to accumulation risks – as a result, recalls have become larger and more costly over time. For example, an airbag or an engine could be recalled due to a defect, affecting many companies and models.

The increasing complexity of technology is another significant driver of industry losses, due to factors such as increased time and labor rates to make repairs, more specialized training for mechanics and other repairers, and the increasing price of parts.

Costly food safety risks and recalls

Food recalls are on the rise globally due to factors such as global manufacturing, fewer suppliers in complex supply chains, enhanced regulatory scrutiny, as well as improved technology which allows for better traceability and pathogen detection. Manufacturers need to recognize these factors and be diligent about who their suppliers are and conduct regular audits.

The coronavirus pandemic could have a significant impact on – and pose special challenges for – food recalls in future: On one hand, hygiene standards have dramatically increased, which could reduce contamination risks which are a major cause of food and beverage recalls. On the other hand, with new operations, temporarily closed and restarted factories, remote workforces, decreases in regulatory visits and erratic supply chains, risk exposures could also swell moving forward.

Riots and civil unrest threaten beyond physical damage

The “yellow vest” protests in France, civil unrest in Chile, Hong Kong and Bolivia and most recently the racially-charged riots in the US are high-profile examples of the rise of civil unrest globally.

Political violence increasingly causes property damage, disruption and loss of attraction and revenues to many businesses. For example, civil disorder in the wake of the death of George Floyd in many US cities is expected to have caused losses of more than $1bn. There are numerous insurance claims notified under strikes, riots and civil commotion or looting insurance coverages. According to AGCS experts, the coronavirus outbreak may have temporarily suppressed civil unrest in some countries, but the underlying social issues have not been solved, and further protests will likely occur in the near future.

Indoor air quality after coronavirus

Environmental pollution incidents can have damaging consequences for a business – two risks are particularly paramount: indoor air quality concerns with legionella and mold growth and, secondly the increasing risk of environmentally-driven prosecutions, fines and remedial actions, as public awareness for pollution and natural capital depletion grows.

Mold and legionella risks have been exacerbated by the coronavirus shutdown of commercial buildings or hotels: When certain air quality systems or water installation systems are dormant for a while they are more susceptible to contamination by bacteria. On top of that, continued, undetected mold growth may result from real estate companies delaying planned maintenance or renovation activities.

Major causes of liability claims and potential coronavirus impacts

The report also analyzes some of the major causes of insurance industry liability claims over the past five years – defective product incidents account for half of the value of all claims –and looks at how the coronavirus outbreak is already impacting the insurance sector. With more people staying at home through the pandemic, and with the temporary closure of many shops, airports and businesses, notifications of slip and fall incidents, which are one of the major causes of liability claims, have slowed. However, the market could see claims brought by third-parties for injury or property damage due to failure to adequately protect against the coronavirus, as well as employee action against employers who did not appropriately protect them. Product liability and recall claims tend to follow economic activity, so there could be an impact in these areas with the economic downturn. Meanwhile, restarting production after periods of hibernation may give rise to human error incidents.

About Allianz Global Corporate & Specialty SE

Allianz Global Corporate & Specialty (AGCS) SE is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancyProperty-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 32 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,450 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.

www.agcs.allianz.com

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New Burford Capital Research Reveals Significant Opportunities for Businesses Through Patent Monetization

By Harry Moran |

Burford Capital, the leading global finance and asset management firm focused on law, today releases new research on patent monetization, a means for businesses with significant intellectual property to generate revenue from patent assets through licensing, direct enforcement and corporate divestitures. With high research and development costs, long development timelines and intense IP competition, CFOs and GCs are faced with the challenge of seeking greater value from their companies' patent portfolios without diverting capital from core business operations. Moreover, converting underutilized intellectual property into liquid assets enables companies to fuel ongoing innovation and drive future growth.

Despite substantial investments in securing and maintaining patents, many companies fall short in leveraging their intellectual property—resulting in missed financial opportunities and ongoing costs that could otherwise be offset through monetization. This research shows companies shifting to a more proactive stance toward patent monetization as they face mounting economic pressures, rising costs of maintaining large patent portfolios and headline-generating enforcements and divestitures by major brands that increase acceptance. Nearly 70% of in-house lawyers say their organizations are more likely to monetize patents today than a decade ago, and 73% report that patent monetization revenue has grown over the last 10 years.

"Patent monetization remains a significantly underutilized asset for many businesses," said Christopher Bogart, CEO of Burford Capital. "Companies frequently hold valuable patents that require substantial investment to enforce, incurring significant expense—risk we routinely finance for clients. In today's climate of intensifying global competition and rapidly evolving IP enforcement landscapes, legal finance empowers companies to strengthen their patent monetization strategies and take a more proactive, value-driven approach to IP management."

"Companies have a significant opportunity to unlock value from their intellectual property," said Katharine Wolanyk, Managing Director at Burford Capital and head of its intellectual property and patent litigation finance division. "In conversations with CFOs and general counsel across industries, we frequently hear that patent portfolios are viewed as cost centers rather than assets, and this research substantiates that assertion. Legal finance offers a powerful solution by transforming underutilized IP assets into a source of liquidity that can fuel business priorities and allow companies to continue the essential cycle of innovation."

Key findings from the study include:

  • Companies are missing revenue opportunities: Even as patent monetization is increasing, 79% of in-house lawyers say that more than a quarter of their patent portfolio is underutilized. The costs of maintaining patents without monetization include lost revenue, delayed market entry and reduced market share.
  • Revenue generated by patent monetization is growing: 73% of in-house lawyers report that revenue from patent monetization has increased over the last 10 years and 69% of in-house lawyers say their organizations have become more likely to monetize patents in the past decade.
  • Divestiture is a fast-growing monetization strategy: 71% of in-house lawyers have already divested patents or are actively exploring divestiture options.
  • Clients can de-risk direct enforcement with finance: 72% of law firm lawyers cite the high cost of litigation as a deterrent to clients pursuing meritorious patent claims.
  • Legal finance plays a growing role in patent monetization: 59% of law firm lawyers say clients use legal finance for patent monetization; 51% of in-house lawyers say they are actively planning or exploring the use of legal finance to support patent enforcement and monetization going forward.
  • Global patent monetization is active: The US remains the top market for patent monetization due to strong enforcement mechanisms. The Unified Patent Court (UPC) is driving change in Europe, with 74% of in-house lawyers expecting increased enforcement in the region.

This research, commissioned by Burford and conducted by GLG, captures insights from 300 in-house IP counsel and law firm partners involved in patent litigation in North America, Europe and Asia.

The research report can be downloaded on Burford's website.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery, and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and works with companies and law firms around the world from its global network of offices.

For more information, please visit www.burfordcapital.com.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares or other securities of Burford.

Court House Capital Appoints New CEO as Michelle Silvers Moves into Chairman Role

By Harry Moran |

Court House Capital is pleased to announce the appointment of Matt Hourn as its new Chief Executive Officer, effective 14 April 2025. This strategic leadership transition marks an exciting new chapter for the company as Michelle Silvers, who has served as CEO since 2020, steps into the role of Chairman of the Board. 

Michelle Silvers has been instrumental in Court House Capital’s growth, innovation, and performance since its inception. Her move into the Chairman position reflects the company's ongoing commitment to visionary leadership and long-term success. 

"Leading Court House Capital has been an incredible journey, and I am proud of what we've built. I look forward to continuing to support the company's future in a strategic capacity as Chairman." Michelle Silvers, Chairman, Court House Capital 

Incoming CEO Matt Hourn brings over 25 years of experience in commercial litigation and is cofounder of Court House Capital. His strong commercial insight and legal expertise, leadership capabilities, and innovative vision make him well-suited to drive the next phase of growth. 

"I am honoured to step into the role of CEO and build on the strong foundation Michelle has established," Matt Hourn, Chief Executive Officer, Court House Capital. 

This transition underscores the firm’s commitment to continuity and strategic evolution, positioning Court House Capital for sustained success. 

ABOUT COURT HOUSE CAPITAL 

Court House Capital is a leading litigation funder focused on cases in Australia and New Zealand. Led by industry founders, with Australian based capital, the team is renowned for expertise, agility and collaboration. courthousecapital.com.au 

IQuote Limited Strengthens Senior Leadership Team with New Director Appointment

By Harry Moran |

Manchester-based litigation finance firm IQuote Limited has bolstered its senior leadership team with the appointment of a new Director of Campaigns, reinforcing its commitment to expansion and innovation in the sector.

Stepping into the role is Katie Doherty, an experienced litigation finance specialist with a track record of driving growth and operational success. 

She has held senior positions at various law firms prior and has worked alongside IQuote CEO Craig Cornick for over 15 years across multiple roles.

Katie said she was both delighted and grateful for the opportunity and expressed a keen desire to get started as soon as possible. 

“It’s an incredibly exciting time for IQuote as we continue expanding our legal tech partnerships and investing in new opportunities,” Katie said.  “This is a fast-moving industry, and I’m looking forward to leading campaigns that will drive the firm’s next stage of growth.

“I can’t wait to get stuck in. IQuote has evolved massively in respect of its business offerings, the firms we are investing in, and the different campaigns we are now exploring. You have to be constantly thinking on your feet; there’s never a dull moment.”

Originally aspiring to become a solicitor, Doherty began her career in legal administration before transitioning into finance and business strategy.  She first collaborated with Craig in 2010, playing a key role in business operations, asset management, and claims handling. 

Katie thanked her team at IQuote for all their help and support.

“They have all been fantastic, and I have so much admiration for Craig,” she said.

“For him nothing is impossible; if you say, ‘it can’t be done,’ he will immediately tell you that it can and how you can make it happen.”

Craig Cornick, CEO of IQuote Limited, said: “Katie has been instrumental in the success of multiple businesses I’ve led, and her ability to think strategically while keeping operations running smoothly is unmatched.

“She knows how to build and execute campaigns that deliver real results, and that’s exactly what we need as we continue to scale. Her expertise in litigation finance, combined with her hands-on leadership style, makes her a perfect fit for this role.

“She’s got an incredible work ethic also. From the very start, Katie has always been willing to roll up her sleeves and do whatever it takes to get the job done. 

“Whether it was managing complex operations or jumping in to solve unexpected challenges, she’s always been a problem-solver. That kind of determination is what sets her apart and why I’m confident she’ll drive real impact in this position.”