The United States insurance industry is grappling with a persistent wave of social inflation, with liability claims costs surging by an annual average of 16% over the last five years, according to Swiss Re Institute.
This trend far outpaces the average rates of economic inflation, which have hovered around 4%. As the economy shifts towards disinflation, the spotlight is now firmly on liability lines, where wages, healthcare expenditures, and social inflation are key drivers of claims severity.