Former Navigators president and CEO Stan Galanski believes small specialty insurers are likely to face the largest impacts from casualty reserve deterioration, the industry veteran told The Insurance Insider.
In an interview with this publication on Tuesday, Galanski said casualty reserve development would likely be a “major issue” in upcoming Q4 and full year results.
While the largest insurers will be “fine” with handling an increase in prior-year claims, “for smaller specialty players, it will be a challenge”, he said.
“For a time we existed in a world of benign large losses - the frequency and severity of large losses were down for a decade,” he said.
“The truth of the matter now is it is very evident that jury verdicts are just through the roof.”
Galanski is now leveraging his 18 years of experience at Navigators to provide advice. Following last year’s sale of the specialty insurer to the Hartford for $2.1bn, Galanski has set up a consultancy business called G58 to work with private equity and insurance clients.
He told this publication that conversations with private equity investors seeking to understand the insurance sector better prompted him to set up his new company.
The consulting firm will pass consulting assignments onto a Navigators alumni network that includes former board member Saul Basch, the specialty carrier’s former chief risk officer Diane Coogan and chief marketing officer LoriAnn Biggers.
“We may not have the glossy reports [of big consultancy firms] but we can provide detailed, actionable solutions,” Galanski said.
The consultancy is coordinating an insurance director boot-camp at St John’s University, New York City, in May. G58 is also looking to set up an investments arm that would likely be launched in 2021.
A statement on the startup’s website says: “We invest in targeted specialty business operating in the property and casualty industry globally. We invite interested parties to contact us to explore strategic financial relationships.”