How long is a piece of string? For insurers, long-tail liability claims are an unpleasant unknown: extending way past policy expiry dates, and eroding value.

Naturally, an industry that deals in assessing and pricing risk would like to understand and quantify long-tail liability, but how?

Long-tail liability claims can arise across many different insurance lines, including construction, events, directors and officers (D&O) liability, and legal and medical malpractice.

Actuarial perspective

Taylor Fry director Danielle Ling views long-tail liability from an actuarial perspective.

‘If we look back in history, one of the reasons behind rising premiums is that claim costs have been rising and insurers can’t make enough profit,’ she says.

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