Swiss Re has reported that social inflation has driven US liability claims to an annual peak of 7% in 2023, marking the first occurrence of this level in two decades. The reinsurer attributes this growth primarily to rising litigation costs, with commercial casualty insurance losses averaging an annual increase of 11% over the past five years, totaling $143 billion. While social inflation is predominantly a US phenomenon, it is also impacting other common-law jurisdictions, including the UK, Australia, and Canada, though to a lesser extent. Swiss Re emphasizes the need for the insurance industry to invest in risk assessment and adopt strategies to effectively manage these rising claims.
