Claims Severity Adds Over $280B to Liability Insurance Losses Since 2015

A landmark report from the Insurance Information Institute (Triple-I) and the Casualty Actuarial Society (CAS) reveals that escalating claim severity—not frequency—is the main force behind surging liability insurance losses, totaling an added $231.6 to $281.2 billion from 2015 through 2024. The study identifies both economic inflation and "legal system abuse" as core drivers of this structural increase, impacting auto and general liability lines. Legal system abuse encompasses factors like third-party litigation funding, rising jury awards, and prolonged settlement processes, all of which inflate claim costs significantly.

For claims adjusters, the data underscores a fundamental shift in the loss landscape. While claim frequency has fallen or plateaued across auto and general liability lines, average claim costs have climbed sharply. In commercial auto, severity rose by over 93% in the past decade despite falling claim counts. Product liability saw the most extreme spike, with a 512% increase in severity. These trends challenge traditional assumptions about risk exposure and highlight the need for refined reserving strategies and litigation management.

With the legal and economic pressures expected to persist, adjusters must prepare for more complex and costlier claims—even if they’re handling fewer. The report reinforces the urgent need for insurers to invest in data-driven claims analysis and to understand jurisdictional nuances where legal system abuse may be more prevalent. It also raises implications for underwriting, reinsurance pricing, and how carriers approach tort reform advocacy.