The exponential growth of liability claims costs and social inflation
n in the United States, in part, is being driven by changing juror sentiment and shifts in societal norms, to analyze from Swiss Re.
“Liability claims costs in the United States have entered a self-reinforcing spiral. Traditional economic drivers such as wage inflation, medical-cost trends an
d CPI growth no longer explains the pace at which liability claims are es
calating,” said an article published by Swiss Re, titled “Verdicts on tri
al: The behavioral science behind America’s skyrocketing legal payouts.”
“This growing gap between economic fundamentals and
actual claims experience has been termed ‘social inflation,’ which is in large part driven by legal system abuse,” the article explained.
Read more: US Nuclear Verdicts Break Records and Drive Social Inflation to 7% in 2023: Report
In its 2025 Behavioral Social Inflation Study, Swiss Re aims to assess the behavioral reasons behind legal system
abuse, which was based on a nationally representative survey of 1,150 U.S. adults, who were presented with a series
s of randomized legal simulations.
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“The findings confirm that juror sentiment has shifted decisively toward accusations, and this shift is concerning ver
dicts in measurable ways,” said the article, which laid out the findings of the study.
“Crucially, the effect is not confined to Fortune 500 companies. In cases involving severe injury, jury are nearly
as likely to recommend high compensation against small and medium-sized enterprises (SMEs) as they are against large corporations,” the article added.
“We’re seeing growing strain on the civil justice system, with more lawsuits yielding damages that often outpace the a
actual harm. Jury awards in the tens of millions are becoming more frequent
nt, shaped by emotion, not just evidence,” said Monica Ningen, CEO P&C Reinsurance US, Swiss Re, in a statement accompanying the report.
“These rising liability costs don't stay in the courtroom. They contribute to higher insurance premiums, reduce
d coverage availability, and increased costs for everyday goods and services,” she emphasized.
"The growing role of third-party litigation funding adds another layer of pressure, often prolonging cases and inflating awards. Given the magnitude of these costs, businesses must pass these pressures along the value chain, and ultimately, consumers bear the impact," Ningen said.