To say that the word “unprecedented” has been overused this year would be an understatement. To avoid using “unprecedented” to describe 2020, I researched its synonyms: unparalleled, unequaled, unmatched, unrivaled, extraordinary, uncommon and the list continues. Each of these words could be used to describe the past year.
Despite the challenges presented in 2020, Lawyers Mutual remained strong and our claims attorneys provided outstanding service to our insureds. Covid-19 and the effect it will have on claims has been our primary concern in 2020. Historically, malpractice claims increase in a bad economy.
Types of claims we expect to see are client abandonment, missed deadlines and bad legal advice related to contract claims and insurance claims like business interruption. Areas of practice expected to be affected are personal injury, real estate, family law, bankruptcy, estates and trusts and employment law. Attorney wellness and mental health are also a big concern for the legal profession during the pandemic.
The Claims Department looks forward to continuing to serve our insureds in 2021.
The COVID-19 pandemic presented us with the urgent need to assist our policyholders. We reached out and we listened. The Underwriting Department worked with policyholders throughout 2020 to extend policy terms and modify payment plans for those who were struggling with the impact of the stay-at-home orders and the economic uncertainty brought by the pandemic.
The pandemic also reminded us of the importance of our mission – to be a partner with North Carolina attorneys. We are more than an insurance company promising an online experience or discount in premium. The value of being insured with a mutual insurance company is that our success comes from helping our policyholders be successful. The Underwriting Department is a group of people who care about providing you with protection that matters and striving to do the right thing for all our policyholders. That is why we were able to increase our number of insured attorneys to over 7,900 and improve our retention rate above 92% in 2020.
As we look to 2021, the Underwriting Department will continue to work with policyholders struggling as a result of the effects of the pandemic. We will also return our focus to expanding our insured portal to include:
In 2020, the Client Services Team quickly learned to pivot to meet the evolving needs of our legal community.
With the pandemic disrupting law firm operations and legal services, we shifted our communications to spotlight key messaging from the courts and new approaches to law firm management with emphasis on technology and safety protocols. And our training programs went virtual! We adapted our outreach to help guide our insureds through the challenges of running a law practice during a pandemic.
To gain insight directly from our insureds about their stressors and concerns, we launched a COVID-19 Insured Survey. We learned a great deal in those responses which led to a heightened focus on leadership, legal ops and wellness resources.
Even in a pandemic, our end goal remained the same - to keep our insureds and legal community safe and informed. In the new year, we look forward to continuing our mission of providing value to our insureds through education and the sharing of resources to help lawyers better serve their clients.
The following information summarizes the financial position and operations of Lawyers Mutual Liability Insurance Company of North Carolina for the two years ending December 31, 2020. This information is based on statutory accounting principles codified by the National Association of Insurance Commissioners and subject to any deviations prescribed or permitted by the North Carolina Department of Insurance. An electronic copy of the Company's 2020 Annual Statement is available upon request.
The COVID-19 pandemic is not completely in our rearview mirror and has had serious personal and economic effects on the lives of our insureds and colleagues.
Here at Lawyers Mutual, claims were more frequent and severe during 2020. In addition, the Company saw a 5 percent decline in cash flow early during the pandemic and statewide lockdown. Fortunately, the declines in cash flows reversed by end of year. The Company’s strong surplus position, along with harvesting of investment gains on sales later in the year, and significant dividends from subsidiaries (Lawyers Insurance Agency and LM Title Agency), allowed the issuance of a policyholder dividend.
Last year it was noted that our Enterprise and Operational Risk Management Team operates largely in the background with tasks such as maintaining the technology and security programs, supporting other departments through business analytics, and developing and testing policies and procedures to maintain operations through unexpected events. In 2020 we were tested, just as you were, with a global pandemic and an increase in cyber-attacks.
An important component of any business – insurance company, law firm, retail store, etc. – is to have a plan on how to handle the unexpected. The past year has given us time to test and refine our plans in light of real-world disruptions. We also have a variety of toolkits available for all of you to use as a starting point. A great idea would be to begin with what you did this year and make modifications based on what worked well and what could be improved.
2020 has highlighted that our entire legal community is connected, resilient, and able to leverage new technologies to ensure the continuity of services. We all discovered we are more adaptable than we may have previously thought. Together, we will continue our 44-year tradition of supporting one another to meet the new challenges that arise.