The Defense Intelligence Gap: Why Carriers Are Losing Ground at the Negotiation Table

‍A look at Taylor Smith's January 2026 Risk & Insurance piece, and what it means for claims organizations ready to close the gap.

In The Defense Intelligence Gap: Why Litigation Portfolio Values Are Accelerating in an AI Era, published by Risk & Insurance on January 5, 2026, Taylor Smith (founder of Suite 200 Solutions) reframes one of the most discussed topics in P&C: nuclear verdicts and social inflation are not purely external forces. They are, in part, the byproduct of how the defense side manages, or fails to manage, litigation intelligence at scale.

It's a sharp diagnosis, and it should sit on every claims executive's desk.

The plaintiff bar is no longer negotiating in isolation

Smith's central argument is that plaintiff firms have quietly built something the defense side hasn't: coordinated intelligence. Venue outcomes, judicial tendencies, jury behavior, carrier settlement patterns, and opposing counsel behavior are all being aggregated, reused, and operationalized through AI. Demand packages are calibrated, evidence-backed, and AI-generated.

The scale of investment is striking. EvenUp Law alone has raised $385M, on par with full-stack insurers like Lemonade or Hippo. Defense-oriented investments don't come close.

What this enables is the plaintiff bar's real edge: coordination at scale. Each settlement informs the next. Each verdict refines expectations. Variance shrinks, posture sharpens, and escalation becomes systematic rather than speculative.

Three weaknesses fragmentation creates on the defense side

Defense organizations operate on the opposite logic. Each carrier sees only its own inventory. Each defense firm sees only a sliver of plaintiff counsel behavior. Smith identifies three systemic consequences:

• Uncertain valuation anchors. Without shared benchmarks, claims teams can't distinguish between fair evolution and inflated drift.
• Delayed pattern recognition. Aggressive demand tactics propagate across jurisdictions long before they're identified as trends.
• Inconsistent market signals. Variability in outcomes sends mixed messages to the plaintiff bar about risk tolerance.

The result isn't just higher settlements. It's greater dispersion in outcomes, and that dispersion itself fuels social inflation. When materially similar cases resolve at widely divergent values, the highest numbers become the new reference points. What looks like runaway juries is, in part, the market responding rationally to inconsistent defense signals.

The three shifts the industry needs

Smith calls for three structural changes:

1. Better internal communication about value. Coherence across a carrier's own portfolio, similar to reserving discipline.
2. Rethinking collective intelligence. Other parts of insurance already pool data. Litigation negotiation remains a notable exception.
3. AI as a counterweight, not a curiosity. Deliberate, governed adoption to achieve parity with plaintiff-side tooling.

Where SigmaSight fits in

Smith's framing maps almost one-to-one onto what SigmaSight was built to deliver.

Our platform gives claims organizations the AI infrastructure to close the intelligence gap, not by replacing professional judgment, but by reinforcing it across files, teams and venues. Three products, one ecosystem:

• Analyzer. Surfaces venue-specific leverage points, plaintiff counsel patterns, and consistent valuation anchors across an entire litigation portfolio.
• Synthesizer. Builds disciplined, evidence-based negotiation positions calibrated to the realities of each case, reducing variance across similar files.
• Negotiator. Operationalizes the coordinated, evidence-led negotiation posture Smith argues the defense industry urgently needs.

Defense teams still exert their greatest influence at the negotiation table, where 99% of cases settle. Closing the intelligence gap is how that influence gets restored.

Read the full article on Risk & Insurance: The Defense Intelligence Gap: Why Litigation Portfolio Values Are Accelerating in an AI Era

Ready to see what coordinated defense intelligence looks like in practice? Request a demo of Negotiator.

‍