Insurers face “evolving implications” as medical understanding of head injuries linked to contact sports improves, Barry Nilsson says.

Potential legislative changes around chronic traumatic encephalopathy (CTE) lawsuits seeking compensation are expected to affect the industry too, according to the law firm.

“Currently, a definitive diagnosis of CTE is only possible following post-mortem examination,” Barry Nilsson says in a report today. “For insurers, it is evident that CTE claims will continue to rise in volume as medical science and legislative regulations evolve.

“We anticipate that these claims will become a significant part of the Australian claims landscape, particularly if a definitive link is established between concussions and CTE, and/or if CTE becomes diagnosable pre-mortem.”

The report – Navigating CTE Claims: A Guide for Insurers – says there has been an increase in such claims in Australia due to growing awareness of the medical condition.

“At present, these claims appear focused on alleged CTE suffered as a result of repeated head injuries while playing competitive sport.”

The law firm anticipates CTE claims will increasingly extend beyond professional sport to include amateur athletes, local leagues and schools, plus victims of frequent physical assault.

“From an exposure perspective, insurers are already taking steps to mitigate the ongoing uncertainty surrounding long-term CTE risk,” the report says, citing the example of Zurich’s recent decision to exclude concussion-related injuries in its group program for AFL players.

“Until medical science provides more definitive answers, insurers face a challenging balancing act in assessing a complex neurological clinical condition against mitigating financial exposure.”

The report says insurers can consider revising underwriting models to account for concussion-related risks; using policy sublimits to reduce exposure; training claims assessors to manage complex CTE claims; and establishing a retroactive date in a policy that is more limited for CTE claims.