Wolfram-Ferdinand Schultz (pictured), head of casualty treaty for Continental Europe at Howden Re, has outlined key legal, strategic, and structural considerations facing international firms with exposure to US casualty risks.
His comments build on findings from a recent whitepaper and come as global trade continues to intersect with the evolving liability environment in the US
US exposure remains a critical issue for companies operating internationally, given the central role of trade between US and non-US firms. The US legal system is dynamic, with frequent shifts requiring close monitoring to avoid unanticipated disruptions. These exposures are not solely barriers, but elements requiring strategic analysis to support broader corporate planning.
The whitepaper explores multiple factors that influence US casualty risk. These include general inflation in sectors such as healthcare and legal services, which contribute to rising claims costs and operational pressure on insurers.
Social inflation – defined by broader liability interpretations, increased litigation frequency, and growing jury awards – was also cited as a significant driver. Societal change was identified as another factor impacting risk development, reinforcing the need for insurance and reinsurance programs specifically tailored to the US market.
High-value legal awards, often referred to as “nuclear verdicts,” though not common, present another challenge. These verdicts can affect capital modeling and broader enterprise risk planning. The presence of these elements makes it essential for global insurance programs to reflect US conditions directly, rather than serve as mere extensions of coverage developed for home markets.
Risk mitigation also goes beyond reducing losses and instead centers on improving the structure of risk transfer, pricing mechanisms, and retention strategies. Proprietary analytics tools are used to help clients forecast emerging exposures and construct reinsurance programs that can adapt over time.
Broader conditions in the reinsurance market have also influenced Howden Re's approach. According to the firm's analysis, risk-adjusted price decreases were observed across several sectors during recent renewals, including US casualty reinsurance.
The shift was attributed in part to increased focus on litigation trends and loss cost assessments. This environment, while favorable for buyers, has underscored the need for data-driven decisions and flexible structuring.
Howden Re has also emphasized the importance of collaboration across the sector to support innovation, especially as casualty risk becomes increasingly complex. The firm has encouraged the industry to work collectively on new frameworks that respond to both emerging threats and shifting capital dynamics.
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