Social inflation is responsible for jury verdicts in billions of dollars. (Photo: solvod/iStock)
The term "social inflation" describes rising insurance losses due to the growing emergence of litigation funders, higher jury awards, more liberal workers' compensation claims, legislated compensation increases and new tort and negligence concepts — a phenomenon especially prevalent in the U.S. but which is now growing globally.
According to Cornerstone Research, in the U.S., alone, in 2019, there were 74 class action settlements totaling $2 billion and four mega-settlements greater than $100 million, representing 45% of all settlement dollars (but only 5% of all cases).
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