According to a new report from Insurance Information Institute (Triple-I), social inflation has increased claim payouts for commercial auto insurance liability in the US alone by over $20 billion between 2010 and 2019.
The report, which was in partnership with the Casualty Actuarial Society (CAS), showed that Social Inflation and Loss Development confirms and quantifies as one of the primary factors driving up the cost of commercial auto insurance.
A separate report from Insurance Research Council (IRC) explained that losses across several insurance lines have accelerated in recent years much faster than economic inflation alone can explain.
Whilst the report focused on commercial auto insurance, it also identified evidence of similar trends in other lines, such as ‘other liability occurrence’ and claims-made medical malpractice.
Considered to be a growing cost of doing business in the insurance industry, social inflation is influenced by negative public sentiment about larger corporations, litigation funding, and tort reform rollbacks at the state legislative level, all of which have increased liability costs.