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Social Inflation's Impact on Property-Casualty Claims is Growing, According to a New White Paper from IRC

MALVERN, Pa., June 2, 2020— Social inflation is having a direct and significant impact on liability risk and insurance, generating rapid cost increases in commercial insurance lines but also leading to higher costs in personal auto liability. This is the chief finding in a new white paper Social Inflation: Evidence and Impact on Property-Casualty Insurance, from the Insurance Research Council. The white paper, available as a free download, identifies key trends and developments that contribute to and define social inflation and reviews evidence documenting recent changes in each.

The white paper reviews recent rapid growth in insurance claim losses and contrasts recent growth with claim cost growth in previous years. Several recent trends and developments linked to the growth in liability claim losses are examined, including:

  • changes in underlying public attitudes, beliefs and expectations
  • rapid growth in attorney advertising and claim involvement
  • rollbacks of tort reforms limiting compensation for noneconomic damages
  • efforts to retroactively expand the statutes of limitations in several states
  • the emergence of third-party litigation funding
  • a growing number of very large "nuclear" verdicts, and
  • the proliferation of class action lawsuits

“Efforts to ignore provisions in business interruption insurance policies explicitly excluding coverage for losses due to viruses such as Covid-19 represent the latest manifestation of social inflation in the U.S.," said Elizabeth Sprinkel, senior vice president of the IRC. “This white paper will help anyone interested in the subject to better understand social inflation's underlying causes and help fashion effective public policy responses aimed at keeping commercial and personal insurance in the U.S. readily available and affordable.

For more information about Social Inflation: Evidence and Impact on Property-Casualty Insurance, contact David Corum at (484) 831-9046 or by email at The white paper can be downloaded at

CPCU is a registered trademark of The Institutes. All rights reserved.