Follow the Fortunes: The Case for Aggregation Under a CAT XL

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COVID-19 has sparked new debates about how insurance losses are identified, categorized, defined and potentially aggregated. This is especially true in the reinsurance context. While in the US, insurance claims for losses sustained under business income and extra expense provisions of commercial property policies have largely been denied leaving little to cede to reinsurers, that is not the case under other lines of business including event cancellation and travel insurance coverages. Moreover, in the United Kingdom and in the EU, business interruption claims have been allowed under certain policy forms, which has led to reinsurance cessions.

My colleague Curtis Leitner asked me to co-author an article with him discussing the possibility of aggregating COVID-19 losses using follow-the-fortunes and related principles. I gladly admit that Curtis did the heavy lifting on this one from an analytical point of view. We published the article in the ARIAS Quarterly, Q1 2022. We hope you enjoy the article.

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Published by Larry P. Schiffer, Schiffer Law & Consulting PLLC

After 38-years with boutique and global law firms, Larry P. Schiffer launched an independent legal and consulting practice, Schiffer Law & Consulting PLLC, where he provides services as a lawyer, counselor, consultant, mediator, arbitrator and expert witness. He practices commercial, insurance, and reinsurance litigation, arbitration, and mediation. He provides advice on a wide variety of insurance and reinsurance issues, including claims and disputes, policy wording analysis and drafting, insurance insolvency issues, due diligence for transactions and have insurance or reinsurance components, insurance and reinsurance education and other advice. He is available to appear for clients outside of NY at mediations and conferences as needed on a per diem basis. He is active in legal and trade associations where he has held various leadership positions. He has lectured and has been widely published on reinsurance and other insurance topics. He serves as an Expert Commentator on reinsurance for IRMI.com and co-authored the chapter on reinsurance in the New York State Bar Association’s Insurance Law Practice treatise. He is the editor of the ARIAS•U.S. Quarterly. Mr. Schiffer received his J.D. from Albany Law School, where he graduated cum laude, was a member of the Albany Law Review and a member of the Justinian Society, and received his B.A. magna cum laude from Brooklyn College of the City University of New York. He was admitted to practice in New York in 1980.

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