Why Casualty Claims Are Harder to Settle in 2026 Despite Market Stabilization

After nearly five years of disruption, the U.S. casualty insurance market is entering 2026 with more predictability, but not relief for claims professionals. According to the RPS Casualty Market Report, the industry has settled into a higher baseline defined by underwriting discipline, compressed limits, and greater scrutiny of loss drivers. For adjusters, that means fewer surprises on pricing, but continued pressure on severity, defense strategy, and claim documentation.

Nuclear verdicts remain a central challenge. The report highlights a sharp rise in verdicts exceeding $10 million, fueled by plaintiff-friendly jurisdictions and the expansion of third-party litigation funding. These trends have normalized extreme awards, forcing claims teams to treat once-rare shock losses as expected exposures. Geography now plays an outsized role in claim outcomes, with states like Illinois and Texas presenting materially different risk profiles than California or New York.

The report also underscores how underwriting and claims are increasingly intertwined. Carriers expect proof, not promises. Telematics, training records, safety protocols, and post-incident documentation are no longer optional. For claims adjusters, this translates into heavier front-end investigation, tighter coordination with insureds, and greater reliance on defensible records when files escalate into litigation.

Sector-specific pressures are also reshaping claims workflows. Construction and habitational claims continue to drive outsized verdicts, often under general liability rather than auto. Public entities face uneven capacity tied directly to venue risk, while hospitality claims are scrutinized for liquor liability, assault-and-battery exposure, and crowd management failures. Across sectors, adjusters are managing higher retentions, lower limits, and more exclusions, all of which raise the stakes of early claim decisions.

The takeaway for claims professionals is clear. While the casualty market may feel more stable, the underlying drivers of loss severity have not softened. Claims outcomes in 2026 will hinge on preparation, documentation, jurisdictional awareness, and early engagement with defense strategy. The market is no longer reacting to volatility. It is operating with the expectation that volatility is permanent.