Coronavirus could move the insurance industry into a new era

The “new normal” for the insurance industry that’s been brought on by the coronavirus is starting to take shape – and that might be a good thing.

The longer term impacts on insurance companies can already be seen with Nationwide, which recently revealed that it will be transitioning to a “hybrid operating model." Employees at four of its main campuses will work from the office while in all other locations, staff will permanently be working remotely.

While it’s one of the first insurance companies to unveil its go-forward strategy, Nationwide will likely not be the last to make this kind of switch permanent. In turn, this shift could bode well for an industry that’s traditionally been seen as slow-moving, and potentially even stagnant.

There are plenty of benefits to a remote-work-friendly environment. First, talent can be sourced from many locations instead of just the nearby vicinity, thereby expanding the talent pool. The flexibility of remote working could also appeal to younger generations that are digitally savvy and sometimes averse to the idea of a traditional 9-to-5 office job. That lackluster 4% of millennials who would currently consider a job in insurance could see a boost as a result.

Finally, remote work, as we’ve already seen across the industry over the past two months, places an onus on insurers to implement tech-heavy processes, if they haven’t done so already, to make this “new normal” possible – for employees as well as their customers. So far, the insurance industry as a whole has a less-than-stellar track record with digital transformation. Insurers tend to lag behind other industries when it comes to digital initiatives, and the double Ps – paper and PDFs – continue to be used to collect customer data for key processes such as policy sales, onboarding, or claims.

Of course, there are likewise benefits of working side by side, literally, with colleagues and clients. In the case of new entrants to the industry, working in a physical space with more experienced colleagues gives them a direct pipeline to someone with years of expertise who they can physically turn to for advice. For brokers and agents, offering customers the chance to come into the office to discuss their insurance coverages or being able to visit commercial insureds on their premises will remain a crucial part of the job, and one that won’t be easily replaced by technology.

However, as in the case of Nationwide, we could see more hybrid remote work models that appear across the industry, where the irreplaceable insurance tasks are kept in place, but those that can be innovated upon will be updated.

Even if insurers have already taken some of these steps before the pandemic – and to their credit, many firms have kept pace with the times – there’s an opportunity for a reputation overhaul. If the industry more broadly is able to reinvent itself to fit into the new normal successfully, the image of insurance that many people (including potential future employees and customers) still have in their minds could finally evolve into the 21st century and beyond.

Source: Insurance Business America – 7/1/20 Author: Alicja Grzadkowska

11th Circuit Refuses to Open ‘Loophole’ for Cruise Line Lawsuits

A plaintiff’s attorney cannot avoid a showdown with a cruise line at the federal courthouse in Miami simply by pleading the case as an action that does not require the court’s jurisdiction under admiralty law, a federal appellate court ruled Tuesday.

The 11th Circuit Court of Appeals reversed, vacated and remanded a decision by U.S. District Court Judge Ursula Ungaro that found the court had no jurisdiction to hear Carmela DeRoy’s lawsuit against Carnival Corp. That ruling, if upheld, would have allowed the claim to proceed to state court and a possible jury trial.

DeRoy’s attorney, M. Benjamin Murphey, filed the suit as an “in personam” action to get around a forum-selection clause in Carnival’s passenger agreement that requires federal courts to hear any disputes when federal jurisdiction applies to the claim.

The legal term refers to a court’s jurisdiction over a person, as opposed to property. Admiralty law is derived from the federal courts’ jurisdiction over seafaring vessels.

“It was a creative effort,” the 11th Circuit panel said in its opinion.

“But DeRoy’s proposed loophole does not exist, so she cannot escape the forum-selection clause’s ironclad consequences.”

The injury that prompted the lawsuit is not mentioned until the 13th page of a 16-page complaint: DeRoy was injured when she tripped over a dip in the carpeting on the 6th deck of Carnival’s Valor cruise ship. Murphey said his client suffered an “orthopedic injury.”

Much of the rest of the complaint presents arguments as to why the U.S. Court for the Southern District of Florida has no jurisdiction.

“We all know the state of play,” Murphey said in a telephone interview.

“If I’m going to have to fight somebody, I want to fight where the terms are best for me.”

The complaint that Murphey wrote on DeRoy’s behalf says that federal courts have for many years failed to understand that passengers don’t have to file claims against cruise lines under admiralty law. Court decisions have confused the concepts of forum, subject-matter jurisdiction, personal jurisdiction, claims presented and applicable law, the suit says.

Murphey’s law firm, Lawlor White & Murphey in Fort Lauderdale, represented some of the plaintiffs in those lawsuits. In DeRoy’s case the firm argued that the federal court lacked jurisdiction. DeRoy is a Florida resident and Carnival is headquartered in South Florida, so there’s no diversity, the suit argues. The court’s jurisdiction under admiralty law doesn’t apply because the suit was filed “in personam,” the complaint says.

The 11th Circuit didn’t agree. The panel’s opinion notes that DeRoy had also pursued a lawsuit in state court. The Florida Third District Court of Appeal, which has jurisdiction, has ruled that the forum-selection clauses in Carnival’s passenger agreements were enforceable in three previous decisions.

The appellate court said the U.S. Supreme Court concluded in a 1991 decision that “cruise lines have a special interest in clarifying where they can be sued, since their business involves transporting passengers through many jurisdictions.”

“In short, the forum-selection clause does not contain the loophole DeRoy urges,” the court said in conclusion.

“To the contrary, it serves as a moat around the federal-court forum, ensuring that claims where federal jurisdiction could lie, if litigated at all, stay in federal court.”

Source: Claims Journal – 7/1/20 Author: Jim Sams