Nuclear verdicts in the United States are breaking records with 27 court cases each awarding compensation of more than US$100 million during 2023, according to Swiss Re executives.
Social inflation in US rose to 7% in 2023 – a 20-year high – a situation that is being driven by litigation costs from mega-jury awards, said Dr. Jérôme Jean Haegeli, group chief economist, for Swiss Re, who spoke during a press briefing at this week’s reinsurance Rendez-Vous de Septembre in Monaco.
Joining Haegeli at the briefing to discuss a Swiss Re report on social inflation and litigation trends was Gianfranco Lot, chief underwriting officer, property & casualty reinsurance.
“Social inflation is super costly for consumers, corporations and insurance companies as well,” Haegeli said, noting that social inflation now exceeds economic inflation as the main casualty-claims driver, leading to underwriting losses, higher premiums and reduced insurance capacity. (Swiss Re defines social inflation as the increasing severity of liability claims beyond that explained by economic factors.)
“US commercial casualty insurance losses grew by an averag