Maura Freiwald, head of casualty at Munich Reinsurance America (Munich Re U.S.), stated in a March 4 press release that many survey respondents were unaware of the practice of third-party litigation funding (TPLF) and its impact on higher insurance costs.
"This survey is an important step in raising awareness and educating the public about the tactics being used and the negative impacts of legal system abuse," said Maura Friewald. "This is not going away anytime soon. If left unchecked, it will lead to higher insurance costs, financial strain on insurers, depletion of municipal resources, and disincentives for businesses to take risks."
According to the press release, Munich Re U.S. and the American Property Casualty Insurance Association (APCIA) released the results of a survey about Americans’ perceptions of the U.S. legal system. The survey found that 59% of respondents were unaware of TPLF, through which investment firms and hedge funds "secretly" finance lawsuits in exchange for a percentage of the settlement or awards. Additionally, 88% of respondents said they believe full transparency around all parties with financial stakes in lawsuits should be required. Forty-seven percent of respondents were unaware that plaintiff attorneys in civil lawsuits take significant portions of the settlements or awards.
The survey also revealed that 65% of respondents were not aware of the "tort tax," or the extra costs imposed on consumers by excessive litigation and legal system abuse. Each American household pays a "tort tax" of approximately $3,621 every year due to these costs, which also result in higher insurance prices. Furthermore, 88% of respondents said they believe state and federal lawmakers should address legal system abuse.
Nationwide, the cost of car insurance rose 20.3% over the last year, according to the latest Consumer Price Index summary.
Georgia drivers pay an average of $2,554 annually for full coverage car insurance, more than the national average of $2,311, according to Bankrate. Eighteen-year-old drivers in Georgia pay an average of $7,622 each year for full coverage car insurance.
Freiwald has served as head of casualty at Munich Re U.S. since 2022, according to LinkedIn. She previously worked for Folksamerica Reinsurance, Swiss Re, and SCOR.