General and Auto Liability are characterized by:
- Fewer claims than workers’ compensation but more than property;
- A medium to long “tail;”
- A high portion of costs going toward legal defense.
In some types of liability claims, such as employment practices, over half of the cost is usually in legal defense.
The claims costs of public self-insurers in California have been increasing much faster than general inflation. In some cases, the trend has been more than 5% per year for a very long time. Many occurrences that would not have generated a claim years ago, now, routinely generate claims. Jury awards have also increased substantially in recent years.
What can we do for you?
Self-Insurers often take on very sizeable risks through self-insured retention (“SIR’s”).
We provide projections of what it will cost to self-insure at a wide range of potential SIR’s, in addition to your current SIR. This increases your options once you have obtained matching quotes from excess insurers.
We will also provide “probability level” estimates and projections of your self-insurance liability and projected funding rates. These are convenient measures of the amount of risk that you are assuming through the self-insurance program. They can translate directly into a measurement the amount of capital required to self-insure comfortably.
Bay Actuarial has many years of experience in general and auto liability. We prepare many actuarial reports covering these exposures year after year. We are constantly evaluating the latest trends in claim frequency, average claim amount, etc. We can produce a report very quickly if necessary.