^aThe Geneva Association, 53, rte de Malagnou, 1208 Geneva, Switzerland. E-mail: patrick_liedtke@genevaassociation.org

^*The contribution is based on the activities of The Geneva Association's PROGRES Research Programme on Regulation, Supervision and Legal Issues as well as the initiatives of the insurance industry's joint Liability Regimes Planning Board where The Geneva Association collaborates with five leading international insurance companies (Munich Re, RSA, SCOR, Swiss Re and Zurich Financial Services).

Abstract

The article makes a case for the evolving system of liability regimes being driven by fundamental changes in our socio-economic fabric. The evolution of increasing liability costs, especially prominent in the U.S., can easily spread to other countries as the same preconditions are found there and systemic contagion takes place. This will pose important challenges to the insurance industry, which will have to better comprehend the key drivers and fundamental mechanisms involved. Provided informed and cautious underwriting takes place, this development represents an interesting opportunity.