What is causing increasing claims severity trends, and how should insurance carriers attack the problem?
The questions have been asked many times over the past few years.
Almost without exception, the chief claim officers and heads of litigation with whom we discuss industry trends tell us that their settlement values are increasing. And while nuclear verdicts, social inflation and third-party litigation funding are often mentioned in the context of the increasing pressures they face, we have concluded that the more relevant battlefield is closer to home and frankly more under our control. (emphasis added)
The paragraph tucked inside of the June 2025 report, “Industry Snapshot: Negotiating Claims In the Age of AI-Enabled Plaintiff Advocacy,” conducted by Suite 200 Solutions, grabbed my attention a few months ago as I searched for more answers. The words actually seemed similar to an introduction I wrote to a series of articles Carrier Management published last year, “Unite and Conquer: Industry Battles Social Inflation“:
External fixes like tort reform and third-party litigation funding disclosures are some often-cited methods for reining in escalating jury verdicts and settlement values that continue to worry liability claims professionals and insurance industry executives. But Carrier Management asked several executives to look inward instead…
My mini-crusade to help the industry find internal fixes last year led to some good conversations about shedding some adversarial claims handling tactics occurring between carriers in casualty insurance program towers, about rethinking budget-conscious activities in carrier claims departments that can hinder the ability to counter a well-coordinated plaintiffs’ bar, and about early triage and settlement that might stem the tide of rising claims severity.
Carrier Management sources interviewed for our special report, however, only indirectly brought up the idea that Taylor Smith, founder and president of Suite 200 Solutions, tapped into head on with his firm’s more recent survey report, “Industry Snapshot: Claims Negotiation in the Age of AI-Enabled Plaintiff Advocacy.” The relevant battlefield, “where we believe the wins and losses really happen, is in how the litigated claim is negotiated,” it says.
“It is in how the narrative is framed, how case valuation is anchored, and in how one side persuades the other to accept their story, their valuation, and the risks of not reaching a negotiated settlement,” Smith wrote in the introduction to the Suite 200 Solutions report.
To be sure, there was discussion of anchoring and plaintiff-side skills in persuasion. But what my sources didn’t say—and what jumped out from the pages of the Suite 200 Solutions survey of 56 senior industry claims and litigation professionals—was that “more frequently than not, [insurance] claim professionals have the purse strings but [outside] counsel does the talking.”
That quote is taken from an article Smith wrote for Carrier Management a few months back to summarize key survey findings, “Taking Back Negotiation: Why Claim Professionals Must Lead the Next Chapter.”
I asked Smith to author that article after I stumbled onto a short summary of the original Industry Snapshot report on LinkedIn. “We asked questions about who’s doing the negotiating, their skills, and how we’re doing as an industry when it comes to anchoring, and persuasion and advocacy,” the post said.
Who’s doing the negotiating?
As an editor far removed from the inner workings of carrier claims departments, I had never thought to ask that question. I assumed it was the claims professionals. And Smith’s article does note that this was the case historically. “Claim professionals spearheaded negotiations, drawing on their intimate knowledge of the file, organizational priorities and industry nuances.”
Today, the landscape is inconsistent. The survey found:
- Defense counsel now convey settlement offers more frequently than claim professionals. Both average and median scores for the percentage of negotiation offers conveyed by claim professionals are below 50 percent.
- The proportion of offers made by claim professionals varies widely by organization—from as low as 10 percent to as high as 90 percent—underscoring a lack of industry consensus or standard practice.
A Series Is Born
It’s not always easy to gauge someone’s passion for a subject from a LinkedIn post, but when I reached out to Smith to write an article for Carrier Management about the survey, he enthusiastically accepted the invitation. The article outlines some of the reasons that “counsel is doing the talking” instead of claims professionals, including confidence and training gaps. It also offers a host of reasons why claims professionals should take the lead going forward and why negotiations they put forth should be in written form.
But how can carriers and their claims professionals reassert ownership of the process and leverage the power of the written word? As Smith wrote, they’re up against modern plaintiff attorneys who, “increasingly with the assistance of AI, present detailed, evidence-rich demand packages aiming to anchor negotiations at inflated values while painting a [convincing] narrative that frames future discussions about the case.”
Could Taylor and his connections in the insurance claims world deliver a mini how-to guide in Carrier Management with articles that could jumpstart the education process? “While articles don’t replace formal training, they might be helpful,” I timidly proposed in an email to Smith.
Not only did Smith reply with a quick yes, but he embraced the chance, following up with the delivery of a multi-page proposal to step into the role of guest editor of “Negotiation Reclaimed, a Carrier Management series of educational articles created in partnership with Suite 200 Solutions.”
“No one was trained for this,” he wrote in the proposal, explaining that negotiation is rarely part of law school or continuing legal education, and that claims professionals often lack time or tools to develop the negotiation skill as they face the daunting tasks of juggling high caseloads.
In addition to conceiving the broad theme of the series, Smith developed the individual article topics and reached out to potential authors he viewed as the best candidates to convey the necessary information for each of them. The first installment of the series,”Negotiation Is the Job: Reframing Defense Work in an AI-Enhanced Era” by Ronald B. Morrison of Great American Insurance Group, published today.
“We must commit to putting negotiation where it belongs—at the center of our claims strategy. Because negotiation isn’t a task. It’s the job,” Morrison writes.
Morrison’s article is just a start, setting the table for what’s to come. Smith has committed to four additional articles:
- The Power of the First Offer, promising to review the science of “anchoring,” and why it matters in claims.
- Rebuilding Negotiation Talent, delving into the question of why the skill is missing and how to fix it.
- The Written Word Wins, a primer on how to design documents that influence opposing counsel, judges and mediators.
- Negotiation Metrics, Cultural Shift and the Urgency to Modernize, which will identify trackable items to quantify negotiation impact and, importantly, allow claim teams to advocate for resources and improvements.
Through this collection, Smith aims to help start to “educate defense counsel and claim professionals on negotiation fundamentals and research-backed strategies, [and] equip defense teams with pragmatic, scalable methods to elevate negotiation results and reclaim control of file outcomes.”
With a career in claims and litigation management that started 40 years ago at a medical malpractice mutual insurer, Smith is a uniquely qualified guest editor with a passion for the subject.
Today, Smith serves as president of Suite 200 Solutions, which provides advisory services and market intelligence to claim executives, defense attorneys, technology providers and private equity. He also serves as head of Industry Relationships for SigmaSight.AI, an AI-powered negotiation platform for the defense industry.
Smith is a steering committee member of the CLM’s Litigation Management Taskforce, authors the CLM’s Litigation Management Studies, and has served as chancellor of the CLM’s Litigation Management Institute and a Dean of the CLM’s School of Litigation Management.
He writes frequently on topics critical to our industry’s leadership and serves as a board advisor to multiple firms that sit at the intersection of insurance and technology.
Carrier Management is excited to introduce this series with Morrison’s article today. Look for Part 2 in late October.
Related article: Negotiation Is the Job: Reframing Defense Work in an AI-Enhanced Era