Casualty Market for Education: Marsh

There are many segments in the education insurance market ranging from large colleges and universities to smaller K-12 campuses, but when it comes to casualty risks the exposures are largely the same, said Mark Turkalo, senior vice president, Education and Public Entity Placement leader, at Marsh. In a recent Marsh webcast, 2020 U.S. Education Insurance Market Update, Turkalo stated that about 85% of the risk exposures in casualty are similar in all segments.

Turkalo defined the casualty market for education as going through a “perfect storm” in 2020 with several major players exiting the sector.

Key market trends in the casualty sector include: increased rates/premium; restricted or excluded coverage; reduced capacity; losses growing in frequency and severity; and COVID-19.

“Overall capacity continues to decrease, and re-underwriting is increasing both on the insurance and reinsurance side,” Turkalo said.

He added there is major concern around rising claims severity, as well as the frequency.

Active shooter risk has become a big concern especially in London markets, he said. “We are getting a lot of questions on how campuses are managing this exposure,” he said.

While there are numerous areas where claims are trending upward, Turkalo noted he continues to see “large claims developing from Greek life (hazing), molestation, Title IX claims and law enforcement.”

Going forward, Turkalo says Marsh is expecting that current market conditions will continue, including:

• Conservative underwriting due to unknown claim development.
• More questions asked on renewals and especially on new business.
• Terms and conditions controlled at executive level.
• Diminishing coverage for Sexual Abuse & Molestation (SAM), Traumatic Brain Injury (TBI) and Law Enforcement – Civil Unrest.
• Excess capacity being cut with carrier consolidation with many carriers are exiting the market.
• Communicable Disease exclusions.

There continues to remain questions over the insurability of sexual abuse and molestation in general, Turkalo noted. “Is it insurable? Can we provide it? And how can we provide it?”

Reinsurers are struggling with triggers for SAM coverage, he said. “Should it remain on occurrence, or should it all go to claims made, and what is the benefit of one over the other?” All of this is being discussed to find the next step or solution for sexual abuse and molestation coverage, he added, noting that medical malpractice carriers are now excluding SAM coverage. “So everyone is trying to push off that exposure to other coverages.”

Schools are also struggling with their exposures in today’s newer environment of COVID, he added. “Is it online, hybrid or both?” Only time will define the new cost of capacity, he said.