Social Inflation & Casualty Risk

The question

Social inflation is widely discussed but difficult to isolate. The project needed to define the mechanism clearly enough to explain why liability outcomes were worsening and what that meant for insurers and the people who buy insurance.

What I did

• Started from nuclear verdicts, including the McDonald’s hot-coffee case, and traced how jury attitudes toward corporations changed claim outcomes.
• Showed claim severity rising well above economic inflation, including 27 awards above $100M in 2023 and an estimated $30B added to commercial auto costs.
• Explained the drivers (third-party litigation funding, contingency fees, attorney advertising, and eroding damage caps) and their effect on insurer profitability and consumer premiums.

What it showed

An emerging risk becomes actionable when its causes, its financial path to the insurer, and the resulting cost to customers are shown together.

I chose social inflation as a presentation topic largely because I found it entertaining and unusually relevant to the insurance industry. The research let me dig into nuclear verdicts, litigation funding, attorney advertising, and other forces that can push casualty losses beyond normal economic inflation. It was a topic I genuinely enjoyed learning and presenting.