Chubb’s Greenberg calls for prolonged tort reform campaign
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SAN DIEGO – Insurers and policyholders must adapt to sustained higher levels of economic inflation and “social inflation,” Evan Greenberg, chairman and CEO of Chubb Ltd. said Tuesday.
Inflationary pressures in the U.S. economy are unlikely to ease, and increases in jury verdicts and settlements will continue due to changes in societal values and litigation funding, he said.
Corporations should prepare to fund, with support from insurers, a long-term tort reform campaign to halt the trend, Mr. Greenberg said.
“Inflation is unlikely to return to the Fed’s target of 2%. We’re going to live more permanently in a higher inflationary world,” he said during a keynote session at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference.
Climate change and the transition to renewable energy, increased protectionism, supply chain changes, and deficit-based spending all contribute to higher inflation, he said.
Mr. Greenberg said social inflation also increases costs.
“This is the problem that, to state the obvious, is enduring. It's not episodic. It’s not going away, and it is getting worse,” he said.
More individual verdicts, class action lawsuits and new theories of liability are all driving up the cost of settlements and verdicts, Mr. Greenberg said.
In addition, the trial bar has developed into a “money-making industry” with new funding sources, and society is becoming more “anti-corporation,” he said.
“We’re not going to address this simply as an insurance industry. … But we can do a lot to support it,” Mr. Greenberg said.
Corporations should develop a long-term plan to support tort reform, he said.
“It’s going to take money. It’s going to take talent. It’s going to have to be approached like a long-term political campaign,” Mr. Greenberg said.
