THE FUTURE FOR EMPLOYERS’ LIABILITY Phil Bell Royal and SunAlliance

Overview of the Liability market

The current market Where we are now How did we get there – Over capacity – Law Reform – CFA – Market expertise and practice – Loss of capital – Equity markets

What have been the implications? Reduced capacity Premiums Illegal trading Capital The DWP and OFT reports

The problems with EL The long tail Pricing Reserving Legal uncertainty The hindsight factor Legal costs Risk selection 1. For underwriters

The problems with EL 1. For underwriters Cont’d Risk Management - Proactive risk management - All risk assessments have been undertaken - All employees are properly trained - Provision of all the necessary protective clothing or equipment - Proper records are kept of everything that has been done

The problems with EL 2. FOR EMPLOYEES

The problems with EL 3. FOR EMPLOYERS

Why now? Nothing new Deafness in the 1970s RSI in the 1980s VWF and stress in the 1990s Today it is asbestos ….. again What next?

Is EL viable?

What is required? Separate funding for accident claims and industrial disease claims Accident claims dealt with in existing way Industrial disease claims to be funded separately

Is PL viable?