@Subfiend you and I have discussed a touch of this
But I’d love your take on the worsening crisis.
I only have personal knowledge of V&B many many years ago, and was a true believer that I would be taken care of by Marsh Canada, later Willis Canada before Tuvell, and later still Owl Underwriting.
I’m told that there is a Japanese consortium in the game, and we all know that most of Witherspoon’s customers went to DAN. I’m told that DAN got really big really fast, which is often a recipe for disaster, and that getting insurance next June may be really difficult.
can you bring any insight, especially regarding recent settlements and the taste for consortiums to continue underwriting in-water liability.
please also give an alternative if in-water liability becomes unavailable at any price?
I cannot disclose any information provided as part of an attorney-client relationship, but I can repeat what has been said publicly to those that are listening and my own assessment of where things are now and where they are going.
First, let's do the math. Five years ago, there were four insurance providers for the insurance industry. Now there are two.
Second, the cost of insurance has been climbing, year after year. This is because the insurance companies and their underwriters perceive that the risk of claims, and the cost of defending these claims, are increasing. They see all the information on the amount of claims, settlements and verdicts. This information is provided to them from a variety of sources on a regular basis, and they write the checks when things go wrong. The number of consortiums willing to insure scuba in North America is getting smaller and smaller, faster and faster. When there is a shrinking pool of underwriters available to even consider insuring a particular risk, it is much, much harder to keep this information from being known or shared.
Third, my firm has always tried to keep the cost of defending cases down to a minimum, I have never recommended high settlements (and I don't settle cases very often), and I have never lost a scuba case. This has not helped avoid the worsening insurance crisis. I have heard, anecdotally, that the way my firm controls costs is not universal across the industry. In fact, my firm just replaced a law firm that significantly overestimated the cost and manner of handling a case.
Fourth, professionals in the industry have to recognize the impact being in a declining industry has on insurance companies' willingness to enter the market. According to reliable statistics, there are more people in America that practice tai chi than there are scuba divers. There are more competitive cheerleaders in America than there are scuba divers. If you were an insurance adjuster evaluating whether to insure a particular market, wouldn't you look at the potential pool of customers and then the cost of claims in this market? Are the claims decreasing at the same rate as the number of participants in the activity? Are the number of instructors you will insure increasing or decreasing compared to the number of potential customers, and how are these instructors supposed to compete for new customers in an industry with high financial barriers to entry for new customers? Do the insured professionals cut costs or cut quality?
In my personal and professional opinion, it will take a lot of effort by a lot of professionals in the industry to steer the ship to avoid hitting the iceberg, and I don't see enough of a commitment to do so. There are bright lights in the industry -- a lot of them -- but there are still too many professionals who make excuses, cling to business as usual, are led by liars, and unquestionably believe what they're told. If I were looking for a viable alternative to still earn a living in this industry, I would rent stand up paddle boards.
