Liability claims in the United States are rising at an alarming rate, far beyond what traditional factors like inflation or medical costs can explain. A new study by Swiss Re points to changing jury attitudes and shifts in social views as major causes behind this surge, a phenomenon often called “social inflation.”
Swiss Re’s 2025 Behavioral Social Inflation Study surveyed over 1,100 U.S. adults with different legal scenarios. The results showed that jurors are now more likely to side with plaintiffs and award large payouts, not just against big corporations but also smaller businesses. Injuries, not company size, heavily influence the amount of compensation recommended. In cases of serious harm, jurors tended to give similarly high awards regardless of whether the defendant was a small business or a Fortune 500 company.
Monica Ningen, the CEO of P&C Reinsurance US at Swiss Re, explained that emotional responses are driving up jury awards, often leading to damages much greater than the actual losses. These growing payouts put pressure on insurance companies, which results in higher premiums, reduced coverage, and increased costs that eventually affect everyday consumers.
Another factor making things worse is the rise of third-party litigation funding. This practice finances lawsuits but also tends to drag out cases and push for higher settlements.
Swiss Re’s report highlights how public opinion has changed over recent years. In 2016, 90% of Americans felt there were too many lawsuits. Today, that number has dropped to just 56%. This shows people are more accepting of suing as a way to seek justice.
The study also found differences based on politics, age, and income. Democrats suggested awarding 25% to 65% more compensation than Republicans, with younger people and lower-income groups showing stronger support for suing companies. Some see the legal system as a way to balance economic inequalities, which adds to the trend of higher awards.
Given these findings, Swiss Re suggests that the U.S. legal system is under strain and faces growing costs that are unlikely to ease soon. The company calls for tort reform measures like caps on damages, limits on attorney fees, and more transparency in litigation funding, pointing to states like Florida and Georgia where such reforms have been introduced.
While the study paints a challenging picture for insurers and businesses, it also serves as a warning that these rising legal costs ripple through the economy, affecting everyone. Keeping careful control over insurance policies and pricing will be crucial in managing these risks moving forward.