The exponential growth of liability claims costs and social inflation in the United States, in part, is being driven by changing juror sentiment and shifts in societal norms, according to analysis 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 and CPI growth no longer explain the pace at which liability claims are escalating,” said an article published by Swiss Re, titled “Verdicts on trial: 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 aimed 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 of randomized legal simulations.
“The findings confirm that juror sentiment has shifted decisively toward plaintiffs, and this shift is influencing verdicts 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, jurors 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 actual harm. Jury awards in the tens of millions are becoming more frequent, 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, reduced 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.
The Case for Tort Reform
As a result of these trends, the report said, the case for tort reform is clear.
“Our research shows how public attitudes shaped by a desire to hold companies accountable and a receptiveness to high compensation demands create fertile ground for the plaintiff’s bar, often backed by third-party litigation funders,” the article said.
“Targeted tort reforms have historically helped restore balance to the system,” Swiss Re said, pointing to states like Florida, Georgia and Louisiana, “where legislatures have introduced reforms to cap damages, limit attorney fees and create transparency in litigation funding.”
For insurers and reinsurers, the study reinforces the scale and persistence of uncertainty in the U.S. liability market, but the data offer little hope for near-term relief, the article affirmed.
“Legal system abuse shows no signs of abating, and pricing uncertainty remains extraordinarily high. Maintaining underwriting discipline through prudent limit structures, appropriate attachment points and rate increases that reflect the underlying loss cost trend — is essential to sustaining profitability.”
Diving into the hidden behavioral forces behind legal system abuse, the report pointed to three key findings:
- Attitudinal trends: Litigation becomes a social norm. “At the heart of legal system abuse lies a fundamental shift in public sentiment. Litigation is no longer viewed by the average American as a last resort or an excessive burden on society.” According to Swiss Re’s 2025 behavioral study, just 56% of respondents believe there are too many lawsuits in the U.S., which is a sharp decline from 90% in 2016. “This signals a major shift in perception, with lawsuits increasingly seen as a legitimate tool for exacting justice.”
- Behavioral scenario findings: It’s not the company, it’s the injury. To understand how attitudes toward litigation translate into actual monetary outcomes, survey participants were asked to weigh in on a series of real-world scenarios, which covered slip-and-fall incidents, motor vehicle accidents and product liability cases. Swiss Re found that a clear pattern emerged: Injury severity, not company size, is the strongest driver of verdict behavior. “Large corporates drew slightly more blame and larger awards, but in most cases the differences were modest and not statistically significant.”
- Who’s on the jury matters more than you think. The survey results reveal a strong political, generational and economic skew. For example, self-identified Democratic respondents selected award amounts that were 25% to 65% higher than those proposed by Republicans, with Independents tending to fall between the two groups in terms of award size.
Age and income levels were also factors affecting jury awards. “Younger respondents — especially those under 40 — expressed significantly more plaintiff-friendly views than older generations,” the study said. At the same time, respondents with lower-incomes “favored broader corporate accountability and were more likely to support legal action.” Swiss Re’s analysis determined that this group could “view the legal system as a form of redistributive justice, further reinforcing the trend toward higher awards.”
The article on the social inflation study was authored by Martin Boerlin, head Casualty Pricing North America and chief underwriting officer P&C Reinsurance, and Surbhi Gupta, senior portfolio analyst and CUO P&C Reinsurance.
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