Social inflation is pushing US liability loss costs up, and the pain is spreading from commercial auto to general liability, D&O and medical malpractice. The higher premium rates of so far may not be enough to offset the loss trends, warranting a watchful eye.
The benign US P&C loss cost environment of the past decade appears to be turning.
An increasingly involved and better funded plaintiff bar, and sharply rising jury awards, are pushing up the "social inflation" component of loss costs in US liability.
This is most evident in commercial auto with adverse reserve development and rising premium rates for a number of year.
The stress is now spreading to other liability lines.
Premium rates are firming, but this may not be enough to offset escalating loss costs.
Further potential pain points from opioid litigation and reviver statutes lie ahead.
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