Gary LaBranche, CEO of the Risk Management Society (RIMS), said that nuclear verdicts are increasingly driving up insurance premiums and impacting market dynamics during an episode of the RIMScast podcast on January 14.

According to the podcast, LaBranche explained that nuclear verdicts, characterized by court awards exceeding $10 million, are becoming a growing concern for the insurance industry. These significant payouts lead to increased costs for insurers, which are ultimately passed on to businesses through higher premiums. The rapid rise in such verdicts is creating financial pressures that affect the overall cost of doing business and the stability of the insurance market.

Third-Party Litigation Funding (TPLF) is a financial arrangement where a third party provides funds to support a plaintiff's legal case in exchange for a share of the settlement or award if successful. Driven by rising litigation costs and the complexity of modern disputes, this model aims to enhance access to justice. However, Baker Botts has raised concerns about transparency, conflicts of interest, and potential misuse in promoting frivolous lawsuits.

The Insurance Information Institute (III) reports that TPLF is driving up auto insurance costs, with insurers now paying more than $1.10 for every $1 collected in premiums. TPLF-backed lawsuits increase litigation expenses, settlements, and jury awards, putting further financial strain on the industry. In states like Louisiana, legal system abuse adds over $1,100 annually to residents' insurance costs.

According to his LinkedIn profile, Gary LaBranche is not only the CEO of RIMS but also a seasoned association professional with over 40 years of experience. He has been recognized as a leader in association management and has received numerous honors including ASAE’s Key Award and was named Association Executive of the Year by ASSOCIATION TRENDS.