Analysis from Swiss Re Institute shows that non-economic inflation now accounts for roughly 60% of U.S. liability claims growth. Unlike traditional drivers such as wage or price inflation, this increase stems from legal system dynamics. As a result, historical loss patterns no longer reliably predict outcomes, particularly in severe injury and wrongful death cases.
Public attitudes toward compensation have shifted in recent years. Jury pools increasingly view large verdicts and punitive damages as appropriate mechanisms for corporate accountability. Consequently, the frequency and severity of nuclear verdicts continue to rise. For claims adjusters, this trend necessitates a reassessment of early case evaluation practices, venue risk analysis, and damage anchoring during mediation.
Jury composition also plays a significant role. Younger jurors, who dominate many panels, consistently support higher awards. This dynamic increases volatility even in cases where liability positions remain defensible. As a result, adjusters face greater uncertainty when forecasting outcomes and structuring settlement strategies.
Litigation funding has further intensified these pressures. Most U.S. law firms now utilize third-party funding, which has altered the progression of claims through the legal system. Claims that once resolved through early settlement are more frequently pushed to trial or consolidated into multidistrict litigation. For adjusters handling product, environmental, cyber, and emerging technology claims, these developments drive higher defense costs, extend claim duration, and complicate settlement timing.
Small and mid-sized insureds face particular exposure under these conditions. Swiss Re data indicates that juries are willing to return nuclear verdicts against small and mid-sized enterprises when injuries are severe, even when corporate scale is perceived as limited. In response, adjusters must place greater emphasis on early excess notification, policy limit adequacy reviews, and coordinated defense strategies to manage the risk of catastrophic outcomes.
Outside the United States, similar pressures may be emerging. Expanding class action frameworks and regulatory changes suggest broader claimant pools, longer claim tails, and increased uncertainty. Adjusters managing multinational programs or foreign liability placements should closely monitor these developments, especially as Europe prepares to update its product liability standards in late 2026.
Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com.