Playing with fire

Despite being burnt by long-tail and rising claims and the growing appetite for litigation, the insurance industry remains keen to turn a profit from liability classes. However, this activity has proved fatal for some in the past and still requires extreme caution in navigating what remain potentially treacherous waters. Marcus Alcock reports

Liability is a word that has caused UK insurers a great deal of heartache in recent years as losses have mounted and reserves have had to be increased in the face of continuing adverse claims and mounting uncertainties. Across a plethora of classes, including directors' and officers', employers' liability and public liability, UK insurers have lost millions and have seen their balance sheets ravaged as their exposure to liability risks has cost them dearly.

And it is not as if the problem has