Insurers and reinsurers have become very sophisticated in the identification, analysis and management of risk. There are many wonderful analytical models for managing an array of natural perils and for predictive modeling. The older discipline that is rarely mentioned when talking about the tools available for the management of risk is the art of coverage. Coverage is the misplaced art. Designing reinsurance coverage is an art. For the purposes of this paper, the art of coverage is defined as follows: The iterative and creative collaborative process that combines experience, historical analysis, environmental awareness, intuition and mature judgment to make a balanced risk and reward assessment about emerging uncertainty, emerging risk, existing risk and loss. An interdisciplinary team utilizes this balanced assessment to draft flexible, coverage rich reinsurance clauses and to create properly integrated reinsurance treaties and programs. The final element of this art is to create and implement multi-year tactical and strategic negotiation strategies for the acceptance of these manuscript clauses and programs. Over the past sixty years the economic, legal and cultural bases of the casualty insurance and reinsurance business has changed. America in 2011 is a very different place than America in 1900. Yet accident and occurrence insurance policies and reinsurance treaties written in the early 20th Century may be called out of retirement to respond to losses today. Casualty catastrophe reinsurance treaties protect against large verdicts, multiple insureds involved in a loss, multiple policies involved in a loss, “run away” loss adjustment expense and limited coverage for tort liabilities arising out of claims handling. Over the past 100 years, with properly drafted broad coverage grants (and sufficient limit), these products mitigated the economic impact of social and political risk. The American story of the rise of its middle class during the 20th Century and the resulting social and legal changes may provide some insight into the 21st Century challenges the insurance industry faces as the rest of the world enters the middle class. The basic premise of this paper is that social, political and legal developments over time may result in increased exposures and increasing levels of insurance risk that need to be proactively managed. Coverage and limit are two key tools for proactively managing these risks. The process starts with a touch of humility in our ability to forecast the future. RISK MANAGEMENT IN THE CLIENTS’ CORNER The Art of Coverage December 2011 The problem with forecasting Dr. Philip Tetlock of the Hass Business School at the University of California-Berkeley is an expert on experts.i Twenty five years ago he began an experiment to quantify the forecasting skill of political experts. Over time he enlisted the help of over 300 experts and looked at over 80,000 forecasts. The really shocking news is that these experts were neck and neck with a random number generator. Dr. Tetlock argues that experts often go wrong when they use “simple” models to explain complex systems. In addition, experts like the rest of us don’t handle randomness very well. The failure to forecast accurately is the rule and not the exception. Forecasting failures are legion. In 1979, the CIA missed the fall of the Shah of Iran. Everyone missed the fall of the Berlin Wall in 1989. The December 1991 collapse of the Soviet Union and the birth of fifteen new nations is a classic forecasting failure. 9/11 shocked every American and made al Qaeda a household name. The rise of transnational religious terrorism demonstrated the forecasting failures of the FBI and CIA. The Great Recession revealed that everyone’s financial crystal ball was more cloudy than clear-sighted. It is not just financial or political experts, intelligence officers or law enforcement professionals that experience forecasting failures. Insurance, reinsurance and legal professionals also fail to recognize and adapt to demographic, legal, social and cultural changes that may culminate in major losses. The 1980s liability crisis is an excellent example of how decades of struggle, the emergence of an aggressive middle class and a legal revolution coalesced into a crisis. The importance of history In the 1960s and 1970s many underwriters and brokers ior undervalued “unremarkable,” slowly developing social evolutions. These proved to have the power to bankrupt industries and transform how society compensates injured parties, deters wrong doing and remediates damage. The historical, legal and demographic trends that led up to the 1980s liability crisis are worth studying. The 1980s liability crisis was a time when an avalanche of casualty losses in the United States completely paralyzed the insurance industry. Manufacturers, municipalities, doctors, daycare centers or anyone else could not find insurance. Jobs were lost, garbage not picked up, emergency rooms shuttered and the economy crippled. The United States’ journey, from an agricultural economy to a growing industrial powerhouse to a mature gand industrial economy with a politically active middle class, may hold lessons for the 21st Century. China, India, Brazil, Russia, Turkey and Vietnam are following their own path buthe pattern is similar as they take their place as economicpowers. The emerging middle class will demand significant improvements in infrastructure, governance and quality of lifThey may also demand changes in their legal, legislative or regulatory regimes to remediate the physical and environmental damages that may result from industrialization. It is also interesting to note that as countries follow the progression from agricultural to industrial and middle class powerhouses, solutions to problems in one century may over time become “catastrophic” health risks and losses in a subsequent century. Because they often happen over long periods of time, changes may be overlooked or undervalued until they coalesce into a crisis. We just are not good at forecasting the future. John Kenneth Galbraith once said, “The only function of economic forecasting is to make astrology look respectable.” This inability to consistently forecast the future is a serious prospective and retrospective problem for reinsurance product designers. This problem is compounded by the mismatch between the insurance/reinsurance accounting model and the U.S. legal model. The private law business model, where the applicable statute of limitations begins to run only “upon discovery”, can reach back decades to litigate against companies and, if successful, access any available insurance limit across multiple policy periods. The insurance industry has been writing accident and occurrence policies since the late 1890s; often these policies are brought out of retirement to respond to a new theory of bodily injury or property damage. The casualty insurance policies written today may be called upon in 2111 to respond to damages resulting from new theories of tort. The current insurance/ reinsurance accounting model really punishes those carriers whose past and cumanagement teams lacked the ability or interest to plan ahead and put something away for a rainy day. The insurance/reinsurance accounting model makes buying additional reinsurance limit today to mitigate the current calendar year effect of those “old” losses very unattractive. The lesson is that it is important to invest each year in properly designed casualty catastrophe reinsurance programs with broad coverage grants, few exclusions and adequate limit as a hedge against unanticipated demographic, societal and cultural trends that may coalesce years later into catastrophic losses. The United States’ middle class that emerged after World War II blazed a trail for the emerging global middle class of the 21st Century. In Asia today, as was the case in late 19th or early 20th Century America, people are leaving the farms to work in the cities. The third age of the Industrial Revolution is being powered by the sacrifice and blood of these workers with their productivity generating wealth. Some studies indicate that by 2022 there may be more middle class people than poor people in the world and by 2030 five billion people could be in the middle class. Two thirds of this new middle class or 3.2 billion people will be from Asia.ii They will be the sons and daughters of workers suffering and dying from occupational diseases, whose own children drink and play in polluted water. They will struggle to remediate an environment ravaged by industrial polluters. This rising global middle class will begin to flex its political muscle as it searches for new legislative, regulatory and legal tools to transfer the cost of deterring wrongdoing and compensating the injured. There will be a move to transfer the burden to domestic and foreign companies who will be made to pay the full costs of compensating the injured and remediating the environment. Insurance policies written today, much to their carrier’s surprise, will respond to these new legislative, regulatory and legal solutions in 2030. The emerging Asian middle class will have a different experience than the mid-20th Century American middle class but the journey from agricultural worker to middle class may display broadly similar developmental trends. The emergence of a politically aware and powerful middle class may balance the power between industrial interests and ordinary people and result in new theories of liability and compensation. These new theories of liability result in unexpected losses (from the insurer’s vantpoint) and an array of reinsurance issues. In the 19th Century the United States was predominately an agricultural power. Farmers, living in rural communities, did not readily identify with the urban industrial worker. Farmers needed to get their goods to market. Captains of industry were needed to build the railroads. Entrepreneurs were needed to create industries and transportation systems. The law and society favored industry and the entrepreneurs building America. Regulations were few and basic safety precautions overlooked in an effort to make a profit and to create industries and transportation systems. People were injured and killed. They and their families typically received little or no compensation. There was an underlying theme that accidents happen and injuries and death were merely a cost of progress. These workers assumed the risks associated with production of goods and services and the compensation for these risks were, in theory, included in their wages.iii There was no social safety net for injured workers and their families and the environmental costs of production were transferred to future generations. Until the middle of the 19th Century there was no demand for general liability insurance.iv Industry was insulated by the “general rule” denying liability to persons not in contractual privity. (In addition, there were arguments that protection against one’s own negligence was against public policy.) After the Civil War, there was a growth of industry and an explosion of railroads across the country, analogous to the dot.com revolution of our own era in its speed and scope. As a result of the industrial expansion and the building of railroads, accidents became far more frequent and more costly. A steam-powered locomotive is more likely to kill and cause great damage than horse drawn carriages. The scope of damages and the newly created pools of capital made litigation increasingly attractive as the 19th Century drew to a close. In 1888 the Fidand Casualty Company of New York wrote the first Employer’s Liability poTwenty seven companiewere writing liability insurance by 1909.v The development of liability insurance in the early days o20th Century is the financial fuel that eventually powered the tort revolution enshrined in the 1965 second edition of the Restatement of the Law of Torts. In a very real sense the 1965 Restatement of the Law of Torts democratized negligence by replacing notions of privity and negligencwith strict liability. Insurance, especially the development of Comprehensive Personal Liability insurance as part of a fire policy package, created available pools of capital that made the abolition of “no duty” legal theories practical and Yesterday’s miracle solutions may be tomorrow’s catastrophes Tomorrow’s emerging uncertainty and emerging risks often arise out of today’s solutions. The asbestos crisis, for example, is the unintended offspring of yesterday’s “miracle” solutions to the hazard of conflagration. Fire from Colonial times to the early 20th Century destroyed more property than any other peril. In a world of wooden homes and cities, conflagration was the big killer. The problem became worse as the industrial revolution created industrial centers and large concentrations of value. Consider for example the city of Boston. In 1760 an uncontrolled conflagration destroyed 174 dwellings and 175 warehouses with an estimated loss in 1760 dollars of $100,000. Jump ahead 112 years to 1872 and a fire in Boston destroyed 776 buildings in the commercial sector resulting in losses of $75 million dollars or $1.350 billion in 2004 dollars.vi There was an epidemic of fires that swept the nation in the 1870s. The horrible deaths and catastrophic economic losses united communities, industry and the insurance industry to find solutions to this common enemy. In 1896 the National Fire Protection Association (“NFPA”) was formed. The NFPA was part of an international movement to promote fire safety standards, building codes, professional fire fighting, and practice of fire-resistive constructive construction with fire resistive materials such as asbestos.vii Asbestos was the miracle solution. The NFPA in its Fire Protection Handbook listed asbestos as an “excellent” fire proofing agent.viii In the early 20th Century insurance underwriters, safety engineers, building code officials and other governmental entities required the use of asbestos. After 1900 it became very difficult to build in any urbanized American city without using asbestos. Insurer’s underwriting manuals required the use of asbestos and were reluctant to insure buildings without it. Without insurance (and the use of asbestos) banks did not make loans.ix The Sunday newspapers of the period were replete with ads for paint, siding, flooring and even toothpaste made with asbestos. The fear of fire was so great, immediate and universal that the health risks associated with asbestos were a distant secondary consideration. During the first few years of World War II it was almost as dangerous for Americans to be on the shop floor as on front line; one of the most dangerous industries was ship building.x The wartime ship building boom created unprecedented demand for asbestos. Its ability to withstand high temperatures and corrosion made it ideal for insulating a vessel’s heat producing components.xi It is interesting that in 1943, 1,410,000 workers sustained on the job injuries and 17,000 were killed. This equates to 170 million man days being lost. A staggering comparison is the combat death rate of 18 per 1,000 service members, versus the asbestos-related cancer death rate for wartime shipyard employees of 14 per 1,000 workers.xii Fortune magazine said, “War calls for stepped-up production. Stepped-up production involved increased hazards. The hazards, if not controlled, result in accidents and lost manpower just when the loss may be disastrous.”xiii World War II and the Great Depression were the most important economic events of the 20th Century. World War II, with its massive industrial mobilization, lifted the United States (and the rest of the world) out of the Great Depression. World War II is one of the greatest tragedies in human history but by 1945 the United States became an economic superpower. It also heralded the emergence of the modern middle class.xiv The 1944 G.I. Bill afforded returning veterans with money for home mortgages, colleges and businessThis demand created a boom in home building, road building and the extensive infrastructure necessary to support a middle class life style. Veterans also bought a lot of insurance. In the late 1940s for example, the premiums collected for automobile insurance amounted to around $600 million. A decade later the premiums were approximately $4.4 billion. It is interesting to note that the policies issued in the 1940s, 1950s and 1960s for automobile, workers’ compensation and liability were predominately accident policies. In the 1960s there was a trend to “occurrence” polices for general liability. These policies responded to bodily injury or property damage during the policy period regardless of when the loss was reported. Policies written during this period, assuming their limit is not capped or exhausted could respond to loss well into the 21st Century. This presents a fundamental issue for catastrophe reinsurance product designers. The rise of the post WW II middle class The middle class rejected the idea that industry could ignore the blood cost of war time production. Unlike workers in the 19th Century, this new middle class had the political power to protect themselves. The middle class wanted to protect their post-Depression gains. They understood intuitively that their families were one paycheck away from a Depression lifestyle and as a result, the blood cost of production needed to be borne by those who profited from the production. This middle class mindset found a voice in the labor movement after World War II. The unions put enormous pressure on politicians, academics and judges to reduce the protections afforded industry and to better compensate injured workers. The legal academic community is often a cradle of theories that, over time, can radically change the legal environment in which business operates and the amount of risk insurers and reinsurers ultimately assume. Liberal legal academics and the labor movement after World War II formed a community of interest in pressing for a system in which injury compensation would be transferred from victims to industry and the cost of injury more widely distributed. Schools of thought, from a risk management perspective, such as legal realism, risk distribution, social insurance and enterprise liability which dovetailed with critiques on the limitations of contract law, accelerated this trend. The fall of the Citadel The insurance and reinsurance community spend a lot of time dealing with emerging uncertainty and emerging risks. In retrospect, Professor Prosser’s 1960 The Assault Upon the Citadel (Strict Liability To The Consumer) should have been a storm warning to insurers and reinsurers. Pressure had been building to sweep aside the concepts of privity of contract and negligence and to dramatically expand the practical application of strict liability.xv The battle came to an end in the 1960s with New Jersey Supreme Court’s decision in Henningsen v. Bloomfield Motors, Inc. which held both the manufacturer and the dealer liable without showing negligence and without any privity of contract.xvi Strict liability was no longer limited to food, beverages and lipstick. Strict liability now also applied to an endless list of products from automobiles, tires and airplanes to asbestos insulation and fireproofing. The American Law Institute’s 1965 publication of the second edition of the Restatement of the Law of Torts is the seminal event in casualty reinsurance history.xvii Section 402A seemed ideally suited to perfect cases against the manufacturers, distributors and contractors that used asbestos resulting in asbestosis. Section 402A, as it was adopted by the various states, transformed products liability insurance. The asbestos crisis transformed casualty insurance and reinsurance. Policies written decades before had to respond to damage claims that often spanned decades. The number of asbestos liability suits filed against Johns-Manville prior to 1982 illustrates the change. In 1976 there were 159 cases, in 1978 there were 792 cases and by 1982 the number had jumped to over 6000.xviii The San Francisco Chronicle Chroniclexix in 1986 offered the following comments: • “Deep pockets,” a colorful legal rule in 36 states, means that defendants end up paying not according to their share of responsibility but according to the size of their bank accounts • Punitive damages, which were permitted in 46 states, brushed aside the idea of compensating people for their injuries and asked juries how much it would take to teach the defendants a lesson. • In 1983 insurers paid lawyers nearly $3 billion, or one-fourth of all premiums collected, to defend lawsuits covered by liability policies P The work of legal scholars like Karl Llewellynxx, Fleming James, and William Prosser materially influenced how jurists and legislators viewed injury compensation. It took time, however, for insurance and reinsurance policy drafters to fully appreciate the impact of the “Second Restatement of Torts” on their business. Strict liability was no longer limited to food, beverages and lipstick. Strict liability now also applied to an endless list of products … hoto courtesy of asbestorama@flickr.com From the 1950s through the 1970s, liability insurance was a distant cousin to property insurance and reinsurance. In reinsurance, liability coverage was inexpensive and often incorporated into combined property and casualty placements. One of the most famous of these combined treaties was the “global slip” which afforded insurers with broad property coverage and the limit necessary to protect an insurer’s national or global exposures. Global slips often treated liability coverage as a throw in. These treaties used simple definitions of occurrence lifted from 19th Century marine forms or those of European reinsurers. These reinsurance definitions did not mirror the accident or occurrence definitions recommended by either the mutual or stock rating bureaus. The treaties had few exclusions and, in many cases, did not have aggregate limits of liabilities. These treaties were underwritten by very smart people who were trained in a world where plaintiffs had to prove negligence (outside of food, beverage and other consumables), verdicts were small and there was no long term liability tail. These underwriters learned their craft in a world where the plaintiffs’ bar business model had not evolved into an extremely sophisticated and profitable machine for developing new tort theories, mass marketing potential clients, sophisticated discovery processes and significant specialization. Lester Brinkman in 1994 wrote an article that looked at the impact over a thirty year period of financial incentives on the tort system which stated that the rates of return (adjusted for inflation) in contingent fee cases increased between 400% and 700%. The article also mentions that the increases in contingent fee income resulted in hourly rates that exceeded $1000 an hour and in some cases $5,000 an hour. In “mega-settlements” the hourly rates of return reached $50,000 an hour with total fees ranging from $200 million to $500 million or more.xxi This much money created an incentive for plaintiff lawyers to look for new ways to apply section 402a and to create new torts. The pressure on older insurance policies and reinsurance treaties was enormous. In addition to the pressure placed on the industry by the broad application of strict liability, the industry had to deal with legislative pressure as the emerging middle class sought to clean up the environmental damage caused by 100 years of the Industrial Revolution. The 1980s liability crisis By the middle of the 1980s insurers and reinsurers were reeling from onslaught. In 1986 insurers responding to the liability crisis noted: • In 1985, 13 million lawsuits were filed, one for every 15 Americans • In 1984, there were 401 damage awards of $1 million or more – almost 15 times as many as in 1975 a. Insurers responded by: 1. Withdrawing from certain lines of business 2. Raising rates 3. Adding exclusions 4. Terminating unprofitable agents 5. Reducing limits 6. Pushing for policy form changes 7. Eliminating excessive policy coverage grants 8. Increasing loss reserves 9. Hiring actuaries b. Reinsurers responded by: 1. Getting rid of global slips 2. Raising pricing 3. Limiting coverage as to time a. Sunset clauses b. Commutations clauses c. No nose coverage d. Imposing claims made coverage 4. Adding exclusions. 5. Aggregate liability caps 6. Raising retentions 7. Embracing the 1981 September and December London White Papers 8. Withdrawing from certain lines of business • Lloyd’s of London revealed that American liability claims accounted for 12 percent of its business but 90% of its lossesxxii It is important to take a quick survey of how insurers, reinsurers, consumers, and legislators responded to this liability crisis: 9. Hiring actuaries • Consumers responded to the liability crisis by: – Aggressively shopping for their policies – Seeking protection for difficult to place risks in the alternative risk market which included captives and risk retention groups – Voicing their concerns to regulators and legislators • Legislators – In 1986, state legislators introduced nearly 1400 “liability reform” bills in an attempt to limit non-economic damages, limit recoveries from parties only partially at fault, impose a criminal standard of proof for punitive damages and limit the insurers’ right to cancel policies.xxiii The 1980s liability crisis demonstrated how important casualty insurance (and reinsurance) was to the economy. The lack of insurance did not impact one sector of the economy; it hit almost every sector of the economy. The “fall” of Professor Prosser’s metaphorical privity citadel and the application of section 402a of the “Second Restatement of Torts,” from a risk management perspective, is an interesting example of the law of unintended consequences. The 1980 liability crisis taught several lessons about casualty reinsurance product design: 1. Cognitive bias makes it difficult to anticipate seminal changes that can affect decades of insurance policies decades in the future e.g., section 402A of the “Second Restatement of Torts” or the post-World War II middle class. The hedge for cognitive bias is to develop flexible reinsurance contracts with broad coverage grants. 2. It is important that an enterprise risk management program include a multi-disciplinary effort to identify emerging uncertainty and emerging risk as well as minimize the effects of cognitive bias. 3. Insurance proceeds are the funds that made the legal revolution of the second half of the 20th Century possible. These proceeds will continue to fund legal research and development including the development of new torts. 4. Catastrophe reinsurance product design is a prospective risk management exercise. 5. Coverage is king. 6. Every clause in a reinsurance treaty is a coverage opportunity. 7. Coverage flexibility and limit allows insurers to more effectively deal with unexpected changes. Reinsurance contracts with numerous exclusions or narrow definitions (e.g. occurrence/aggregate) are rarely a good long term purchase. 9. Limit is an investment. The most thoughtfully drafted coverage articles are empty promises if the reinsurance program limits are exhausted. Limit management is an important consideration in any risk management program. 10. In anticipating the “asbestos” type crisis of 2029, whatever it may be, investing in reinsurance limit and coverage each year is an important part of a risk management program. 8. Reinsurance contract drafting requires a team of experts and good reinsurance coverage lawyers. the past and also commit them to the future. Conclusion D. Elton Trueblood, a 20th Century Quaker philosopher and theologian, captures the essence of investing in casualty catastrophe reinsurance as a hedge against emerging uncertainty (and loss) that arises out of demographic, social, legal and political changes over decades: “A man has made at least a start on discovering the meaning of human life when he plants shade trees under which he knows full well he will never sit.” Investing in casualty catastrophe reinsurance coverage and limit is like planting shade trees; it is a gift for the future. The investment in casualty catastrophe coverage and limit is recognition that the analytical tools that have transformed the profession of risk management have their limitations. As Dr. Tetlock’s work demonstrates, expert forecasts are often no better than random number generators, or as Yogi Berra once said, “It is tough to make predictions, especially about the future.” Occurrence and accident policies anchor casualty insurers to the past and also commit them to the future. Such insurers often pay a price for inadequate forecasts that were made decades earlier. These insurers are well served by developing an array of hedging strategies that mitigate forecasting risk. Investing in casualty catastrophe reinsurance limit and coverage is a good hedge for forecasting risk. The future will be no less tumultuous than the past. Today’s insurance policies are going to respond to a host of issues throughout the 21st Century. There are several trends thatchange and increase risk and potential loss insurers face. The United States, for example, at the federal, state and local level is entering a period of austerity. The estimates are sobering. Some forecasts indicate thafederal government’s entitlement and interest payments alonwill exceed federal revenues by 2025.xxiv This implies that there will be no money to pay for anything but entiand interest. Consequently, government programs mIf government programs are cut back or understaffed thplaintiff's bar or state and local government may seek to use private law as a substitute for regulatory enforcement. Much of the recent climate change litigation was designed in part to force the EPA to enforce existing regulations. This approach to enforcement could become more commonplace, increasing demands on insurance. The emergence and urbanization of the middle class in the United States during the 1950s was the big story of the mid-20th Century. This middle class droveverything from hula-hoops to globalization to global warming and strict liability. The big story of the early 21st Century is the rise and urbanization of the global middle class. The next twenty years will be time of mass urbanization and a billion people will move from the farm tthe city. Asia, especially China and India, will be 55% of theworld’s urban population. To put this in perspective, consider how much commercial and residential floor spaceChina and India will have to add to meet this demand. Over the next two decades, if the trends continue, China will have to add forty billion square meters of floor space; the equivalent of ten New York Citys. India, once again assuming the trends continue, will have to add eighteen billion square meters of floor space by 2030; the equivalof four New York Citys.1 If the history of the Unany guide, a byproduct of this industrialization and construwill be injured workers and environmental damage. Wowill eventually require and demand compensation environment will need remediation. Raising taxes or further punishing victims, as was the case in the United States, will not be the preferred approach for compensating the injured or remediating damage; a more politically likely approachwill be to attempt transfer the costs to shareholders ocompanies, both foreign and domestic, that may have profited from this development. The insurance companies (or the captives) that sold these companies policies may finthemselves in a position not dissimilar to carriers in the 1970s and 1980s confronted with a rising tide of asbestos losses. Theses management teams will either be gratefultheir predecessors for hedging emerging uncertainty with a risk management program that incorporates investmentproperly designed casualty catastrophe reinsurance programs or they will be b Occurrence and accident policies anchor casualty insurers to Contact us Willis Re Pete Thomas Chief Risk Officer 5420 Millstream Road, Suite 200 McLeansville, NC 27301 +1 336 574 8813 pete.thomas@willis.com Footnotes i CNN Money, February 18, 2008, Why the experts missed the crash/ money.cnn.com/2009/02/17/pf/experts ii The New Global Middle Class: A Cross-Over from West to East, Homi Kharas and Geoffrey Gertz, Wolfensohn Center for Development at Brookings (Draft version of Chapter 2 in “China’s Emerging Middle Class; Beyond Economic Transformation”) Cheng Li, Editor, Page 5 iii Law in America, Lawerence M. Friedman, 2004 Modern Library Paperback Edition, Copyright 2002 Lawerence Friedman pages 42 – 49. iv The Liability Century, Insurance and Tort Law from the Progressive Era to 9/11, Kenneth S. Abraham, 2008 Harvard University Press, page 29 v Ibid, page 32 vi Urban Conflagrations in the United States, William M. Shields, PHD, pages 1 and 2 viiAsbestos and Fire: Technological Tradeoffs and the Body at Risk, Rachel Maines copyright 1950 and 2005, Kindel edition location 96. viii Ibid, Kindle Location 187 ix Ibid, Kindle Location 193 x Labor’s Home Front – The American Federation of Labor During World War II, Andrew E. Kersten, 2006 New York University Press xii Center for Asbestos Safety in the Workplace, Asbestos in the shipbuilding industry,www. Mesothelioma-mesothelioma.org/shipbuilding xii Ibid xiii Fortune, Death on the Working Front, July 1942 xiv Time U.S., A Brief History of the Middle Class by Claire Suddath, Feb. 27, 2009, www. Time.com/time/nation/article/0,8599,1882147,00.html xv The Fall of the Citadel, William L. Prosser, 50 Minn. L. Rev. 791 1965 1966 xvii Outrageous Misconduct, copyright 1985 by Paul Brodeur, Random House, pages 27-30 xvi 32 N.J.358, 161 A.2d 69 (1960) xviii Outrageous Misconduct, The Asbestos Industry on Trial, Paul Broader, Pantheon Books, New York, Copyright 1985 xix Liability Crisis Has Some Cures, Royal F. Oaks, The San Francisco Chronicle January 1, 1986 xx Karl Llewellyn and the Intellectual Foundations of Enterprise Liability Theory, John B. Clutterbuck, Yale Law Journal, May 1988, 97 Yale L.J 1131 xxi On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes are Principally Determined by Lawyers’ Rates of Return, Lester Brickman, Cardozo Law Review, April 1994, 15 Cardozo L. Rev, 1755 xxii The Liability Insurance Spiral by Tamar Lewin, The New York Times, March 8, 1986 xxiii The Liability Crisis: Companies, Consumers and the Courts: Pro and Con: Setting Limits on Lawsuits and Lawyers, New York Times, May 25, 1986 xxiv USA, INC, A Basic Summary of America’s Financial Statements, February 2011, created and compiled by Mary Meeker, KPCB, page xiii 1 Foreign Policy, September/October 2010, Mega cities, page 132,133 Page 9 of 9 December 2011 • Willis Re