Insurance professionals are facing tougher challenges as legal, social, and economic pressures come together in new ways. Stefanie David, chief claims officer for reinsurance at Munich Reinsurance America, highlighted 2025 as a demanding year for managing risks carefully.
One major concern is the misuse of the legal system, which is driving up claims costs. David pointed out that tactics like jury anchoring, outside funding of lawsuits, and aggressive advertising have become common. These strategies add a heavy financial burden on businesses and families — small businesses lose more than $160 billion each year, while the average American family pays over $6,000 extra annually because of these legal abuses. Although some progress has been made with tort reforms aimed at curbing these practices and increasing transparency, more work is needed to protect consumers from the costs linked to the litigation industry.
Another shift in lawsuits is how legal theories are being stretched to cover broad societal harms, a trend David refers to as the “super-tort.” Governments and municipalities are using public nuisance claims to hold businesses accountable for big issues like the opioid crisis, plastics pollution, climate change, processed food, and social media impacts. Courts are even showing more flexibility by treating these claims more like traditional negligence cases. While these cases may seem unusual on their own, together they could signal a big change in how legal responsibility is assigned.
David also raised concerns about “junk science” being used in court cases. Scientific evidence created just to support lawsuits is making it harder for judges to make decisions, especially in large-scale mass tort cases. On top of this, artificial intelligence is playing a growing role. Insurers are starting to use AI to handle claims, but plaintiff lawyers are also using it to strengthen their arguments, especially in mass tort litigation.
Changes in laws are adding to the uncertainty. New rules are reopening and extending the time limits for filing certain lawsuits, particularly abuse cases. This has led to some defendants declaring bankruptcy, complicating matters for both the parties involved and insurance companies. There are also shifting regulations around substances like PFAS chemicals. For example, the European Union is considering a wide ban on these chemicals, while in the U.S., different states are adopting varying standards. This patchwork creates more unknowns for insurers.
On the property insurance side, David noted rising costs are being driven by higher prices for materials and labor. Tariffs, supply chain problems, and worker shortages are making repairs more expensive and slowing recovery after disasters. These challenges are causing insurers to rethink how they handle claims and manage risks. Munich Re is working closely with clients to respond quickly and keep costs from spiraling.
Looking ahead to 2026, David expects new challenges but also opportunities. She emphasized the importance of having skilled claims professionals and developing new talent to keep up with the fast-changing environment. Emerging litigation trends, including lawsuits related to hair relaxers, human trafficking, and weight-loss drugs, require teamwork across different parts of the industry. Munich Re is investing in data and analytics to spot and understand new risks early, working hand-in-hand with clients and partners.
David summed it up by saying the company stays focused on its clients and uses its global experience to offer solid expertise and support, which she believes makes Munich Re stand out in the insurance world.
For more details on Munich Re US, visit munichreamerica.com.