Demotech Urges Insurers to Sustain Trade Association Funding

Joseph L. Petrelli, president and co-founder of Demotech, characterizes the period from 2017 to 2026 as a "lost decade" for the insurance industry. He points to the rise of sophisticated litigation marketing firms that utilize artificial intelligence and targeted online advertising to convert standard policyholder claims into costly, contested legal battles. This phenomenon, which the firm labels "tech-enabled litigation instigation," creates a financial drain that traditional advertising channels struggle to counter.

Sharon Romano Petrelli, vice president and co-founder, emphasizes that the scale of the threat is immense, fueled by billions of dollars in third-party litigation funding. According to the firm, trade associations serve as the primary vehicle for protecting industry reputation, combating fraud, and addressing systemic legal abuse. With outside capital actively reshaping the legal profession, Demotech maintains that membership dues are no longer a discretionary expense, but a necessary investment in the industry's integrity and long-term viability.