Reed Smith's Insurance Recovery Group: Head of The Class In Insurance Law (Again)

Last week, U.S. News-Best Lawyers named Reed Smith its 2015 National Law Firm of the Year in Insurance Law. This is the second consecutive year that U.S. News-Best Lawyers has recognized our Insurance Recovery practice as its top firm for insurance law.

Reed Smith’s Insurance Recovery Group counsels and represents policyholders in insurance disputes and transactions. With more than 85 insurance recovery lawyers in offices around the globe, we represent clients throughout the world, both as an advocate in disputes with insurance carriers, as a trusted advisor for diverse insurance-related issues, and as a counselor in the purchase of insurance products. We have recovered billions of dollars for policyholders in matters involving the entire range of commercial insurance products. In addition to this latest award by U.S. News – Best Lawyers, the group is named among the best policyholder coverage practices by Chambers USA, Chambers UK, Legal 500 US and Legal 500 UK. American Lawyer Media’s Legal Intelligencer named our Insurance Recovery Group one of Pennsylvania’s “Litigation Departments of the Year” for 2014 – the only policyholder-focused firm recognized in the Pennsylvania-based publication – and The National Law Journal named our Chicago Insurance Recovery team the 2014 “Chicago Litigation Department of the Year: Insurance.”

If you have any questions about potential claims, or your insurance program in general, please feel free to contact our Global Practice Group Leader, Douglas E. Cameron, or any Reed Smith Insurance Recovery Group attorney with whom you routinely work.

As Federal and State Agencies Warn of Increased Cyber Threats, Insurance Incentives for Compliance with NIST Cybersecurity Framework May Be on the Horizon

This post was written by J. Andrew Moss and Emily Garrison.

Since the President’s February 2013 Executive Order directing the National Institute of Standards and Technology (NIST) to lead the development of a voluntary framework to address and reduce cyber risks, the agencies and stakeholders involved have been exploring whether to tie the February 2014 Framework for Improving Critical Infrastructure Cybersecurity (the NIST Framework) to incentives such as cyberliability insurance. For example, in a Report to the President on Cybersecurity Incentives, the Treasury Department suggested that “[c]yber insurance can promote adoption of stronger security measures” because, among other reasons, “insurers could require policyholders to comply with minimum security standards as a condition of insurance coverage, including adoption of the Framework.”

The Treasury Department held a public meeting on November 6 that included a discussion of developments in the market for cyberliability insurance and the NIST Framework.

Continue Reading...

Predictable Responses to Benmosche Leak

This morning’s WSJ report that Robert Benmosche, recently appointed CEO of AIG, is unhappy with government pay restrictions, has elicited predictable, less than sympathetic responses. “Tiny Violins” is the headline from the Daily Beast.  New York Magazine’s Daily Intel responded with sarcasm:

Apparently, someone told Robert Benmosche that running the world's largest and most [expletive withheld] insurer was going to be a cakewalk, because three months into the job and two months after returning from a vacation at his Croatian villa, the CEO is considering throwing in the towel, owing to the restrictions placed on him by the company's new owners, the good old United States government.

Continue Reading...

When will the chickens come home to roost? Insurers Use Reserve Releases to Buff Up Underwhelming Financials

Releasing reserves based on early developments is an optimist’s view, [Evan Greenberg, chairman and chief executive officer of ACE Limited] said. “Good news comes early in the casualty business. The bad news always comes late,” he said.

“I do think some companies have released reserves early in an effort to goose earnings,” he said. “It may come back to bite them.”

Link to entire story Here.

As discussed in my prior post P&C fundamentals are pretty bad. According to reports, the only way that insurers showed profits in recent periods was by playing games with their reserves. That is, they revised downward their view of prospective losses to allow them to release reserves, improving the bottom line (on paper, anyway). Such releases covered up “a multitude of sins.”

A report of a Standard & Poor’s June conference on the subject is enlightening and alarming:

Continue Reading...

Insurers Wait for a Hard Market: If Only Wishing Could Make It So

P&C insurance companies are in a tough spot right now. According to a recently released Insurance Services Offices report, their margins have dropped below break-even.  Investment income has fallen through the floor, and the commercial mortgage backed securities market hasn’t even begun to take the hit that analysts predict it will. On top of that, premiums are shrinking, not rising. Not only are rates still dropping but so are the sales and payroll numbers on which the premium rates are computed. As reported in BestWire

… the recession has left commercial insurance buyers with fewer employees and fewer risks to insure. "Our customers are smaller than they were a year before," [Mario P. Vitale, chief executive officer of global corporate for Zurich Financial Services] said.

How does the shrinking customer impact rates? As succinctly explained by Steve Tuckey:

Continue Reading...

The Path of the Umbrella

As Travelers takes AIG’s spot in the Dow Jones Industrial Average, or rather Dow Jones Non-Industrial Average take a moment to check out the path of the iconic red umbrella as it passed from Travelers to Citibank (ironically, Travelers former parent also exiting the Dow) and back again. 

ManU Sponsorship Stays in the Insurance Family

Finally, we can all rest easy. AON is taking over the Manchester United shirt sponsorship rights from AIG, starting in 2010. According to Reuters:

The deal represents a coup for Aon, which has secured one of the most prestigious advertising deals in sport with United's huge global fan base making them one of the top prizes in sports sponsorship.

Click here for full story.