Social inflation is seemingly being discussed everywhere, from news articles to conferences to quarterly earnings calls. And those working in claims are likely dealing with it in some capacity on a daily basis. But what can be done to combat it?

In simple terms, social inflation is the increase in defendants’/insurers’ claim costs over and above general economic inflation. It is not a new phenomenon.

Social inflation occurred in the 1980s, manifesting in the swarm of asbestos and environmental claims/liabilities, and again in the late 1990s/early 2000s in connection with medical malpractice developments.

Moreover, social inflation is not unique to the U.S.; it affects economies across the globe. Class action filings have increased, nuclear verdicts are on the rise and large settlements are becoming more commonplace.