Tipping the Scales: How Social Inflation Weighs on Insurance

Warren Buffet first used the term social inflation in 1977 to describe how society was expanding its view of what is covered by insurance.

When Buffet coined the term, he was referencing the asbestos litigation making headlines and changing society at the time. Four decades later, the continued impacts of growing social inflation are felt across the industry.

This expansion of what is considered insurable along with increasingly high jury verdicts around the country has resulted in a unique challenge for the industry.

Consumers across the U.S. pay an annual tort tax through the increased costs of litigation in their state and insurers face increased loss adjustment expenses and defense costs.