You are reading a single comment by @Scilly.Suffolk and its replies.
Click here to read the full conversation.
-
That was one of the issues.
Well the unprecedented run of Catatrophes (as defined by the market) exposed the fatal flaw of the LMX market, rather than being a separate factor (IIRC, IMHO etc).
But yes, there was huge complacency about what being "liable down to your cufflinks" meant in reality. It was common practice for secretaries etc to be made Names when they retired.
Crazy to think longtail liability was ever written on a "losses occurring" basis, but doctors were suggesting cigarettes to open up the lungs and asbestos was still a "miracle of science" in the '50.
Scilly.Suffolk
That was one of the issues. The other was the weight of claims that came along following huge storms, the loss of a satellite and the Black Monday Crash. When the names were called on for the liquid part of their backing it turned out a lot of them didn't have it and in fact had never had it but had been told, 'don't worry old chap, no one will ever come asking'.
I was asked to write software to look at asbestos runoff claims following a landmark case in the US. It got to the point where the possible losses exceeded the number of digits for a number that the software I was using could hold in a numerical field. Then the claims stopped succeeding in court and the people covered by the insurance policies died off due to 'normal' reasons and the problem went away.