Demotech to Address Insurance Litigation Trends at NAIC Northeast Meeting

Petrelli intends to build upon his 2023 testimony to the Market Regulation and Consumer Affairs Committee, where he first identified the rise of technology-enabled claims instigation. His upcoming briefing will examine how search engine optimization and pay-per-click advertising, backed by external litigation funders, facilitate large-scale legal action. The discussion will specifically address the evolving role of capital investment within plaintiff law firms, which Petrelli argues has fundamentally altered the litigation landscape.

To provide regulators with clearer oversight, Petrelli plans to introduce granular metrics for analyzing "claim transitioning." This approach tracks the lifecycle of insurance claims—categorizing them by whether they are closed with or without payment, or remain outstanding. By distinguishing between standard policyholder claims and those involving third-party financing, he hopes to help stakeholders pinpoint the primary drivers behind recent, sharp increases in loss costs.