LawPRO finished 2012 with a deficit of $2.9 million, according to financial statements presented at the Law Society of Upper Canada Thursday.
The insurer attributed the loss to reduced premium rates and a “troubling, ongoing trend” when it comes to swelling claims figures.
“Claims costs are high and rising,” LawPRO said in its report, adding the number of claims reported to the Ontario insurer in the last year “increased significantly” to 2,560, a jump from less than 1,800 at the beginning of the decade.
In the same period, the average cost per claim also increased by $10,000. The median amount was pulled up by a growing number of severe claims, which cost greater than $100,000. While these exorbitant cases amounted to a claims expense in the $80- to $90-million range between 2007 and 2011, “the 2012 program’s ultimate cost is projected to exceed this range,” said LawPRO.
“The growth in claims is faster than the growth in lawyers and premiums,” said Susan McGrath, chairwoman of LawPRO’s board of directors and a law society bencher in presenting the report.
What McGrath called “Ontario-specific characters,” such as high cost of real estate and legal services also rack up claims expenses.
Not surprisingly, the real estate and litigation practice areas resulted in the majority of claims LawPRO received, amounting to 33 per cent of claims cost.
“Looking more closely at the underlying cause of claims by policy year, we are seeing a startling increase in types such as time management, as well as failure to either know or apply the law,” according to the report.
LawPRO currently has 3,500 open files, the highest number in the last decade. This is “despite a concerted and successful effort on the part of the company’s claims group to close more files than the previous year,” it said.
But LawPRO praised its work when it comes to its expanded online efforts to help lawyers avoid claims, particulary through its Avoid a Claim blog (http://www.avoidaclaim.com/). It also reported a survey result that showed 86 per cent of lawyers were satisfied with how the company handled their claims.
Last year, LawPRO won all six matters it took to trial and on which a decision was rendered. It was also victorious in both matters that went to appeal and succeeded in 18 out of 25 summary judgement applications.
LawPRO’s full report can be found here.
The insurer attributed the loss to reduced premium rates and a “troubling, ongoing trend” when it comes to swelling claims figures.“Claims costs are high and rising,” LawPRO said in its report, adding the number of claims reported to the Ontario insurer in the last year “increased significantly” to 2,560, a jump from less than 1,800 at the beginning of the decade.
In the same period, the average cost per claim also increased by $10,000. The median amount was pulled up by a growing number of severe claims, which cost greater than $100,000. While these exorbitant cases amounted to a claims expense in the $80- to $90-million range between 2007 and 2011, “the 2012 program’s ultimate cost is projected to exceed this range,” said LawPRO.
“The growth in claims is faster than the growth in lawyers and premiums,” said Susan McGrath, chairwoman of LawPRO’s board of directors and a law society bencher in presenting the report.
What McGrath called “Ontario-specific characters,” such as high cost of real estate and legal services also rack up claims expenses.
Not surprisingly, the real estate and litigation practice areas resulted in the majority of claims LawPRO received, amounting to 33 per cent of claims cost.
“Looking more closely at the underlying cause of claims by policy year, we are seeing a startling increase in types such as time management, as well as failure to either know or apply the law,” according to the report.
LawPRO currently has 3,500 open files, the highest number in the last decade. This is “despite a concerted and successful effort on the part of the company’s claims group to close more files than the previous year,” it said.
But LawPRO praised its work when it comes to its expanded online efforts to help lawyers avoid claims, particulary through its Avoid a Claim blog (http://www.avoidaclaim.com/). It also reported a survey result that showed 86 per cent of lawyers were satisfied with how the company handled their claims.
Last year, LawPRO won all six matters it took to trial and on which a decision was rendered. It was also victorious in both matters that went to appeal and succeeded in 18 out of 25 summary judgement applications.
LawPRO’s full report can be found here.
