Presentation on theme: "Product Liability and Product Recall Insurance A Market Perspective"— Presentation transcript:
1 Product Liability and Product Recall Insurance A Market Perspective 9th November 2005Product Liability and Product Recall Insurance A Market PerspectiveGuy MalyonLondon
2 State of the Liability Insurance Market Litigation clearly on the increase throughout EuropeClass action disease is spreadingIncreased EU regulationAccession countries realising the effects of EU membershipPunitive damages appearing in the UKUp until Katrina/Rita/Wilma the market was softeningNow it is flatRe-emergence of European insurers has increased Liability capacityGerling and Axa for exampleProduct Recall capacity is also increasingMarsh
3 Market Reaction to General Product Safety Regulations OverviewProduct Recall insurance is not compulsoryEnforcement agency powers have increasedDemand will outweigh supplyRisk management in UK is sophisticated in general termsMarket PlaceThree main products: Accidental/Malicious/ExtortionLimited markets at primary levelFavourable loss ratios in recent yearsSudan IMore capacity and cheaper premiumsMarsh
4 Liability Insurance Across Europe A comparison with the UK Insurance ComparisonWider cover: financial loss, recall, rip & tearLower deductiblesCheaper premiumsClaims made Vs Occurrence‘Full value’ programmesLegal ComparisonCodified legal systemsAverage awardsLimits purchasedLarge claims in EuropeMarsh
5 Limit of Liability Survey 2005 6000 companies surveyed in 43 countries across 6 continentsAverage global limit purchased - $58 millionAverage European limit purchased - $60 millionCompanies that experienced a loss buy three times the limit of their peersUtilities, Chemicals, Pharmaceuticals, Transportation buy the highest limitsGovernmental, Retail and Consumer Brands buy the lowest limitsOn average Companies with North American exposure buy three times the limit of those withoutEastern Europe buy the least amount of coverMarsh
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