Study Finds Surging Liability Insurance Deficits Driven by Rising Claims Costs

A recent study by the Insurance Information Institute (Triple-I) and the Casualty Actuarial Society (CAS) highlights a significant increase in liability insurance deficits, estimated between $231.6 billion and $281.2 billion over the past decade.

This rise far surpasses what standard economic inflation can explain and underscores growing challenges in the liability insurance sector. Key drivers include large jury awards, case financing, and evolving legal practices that have elevated claims costs and defense expenses across various liability lines, such as personal and commercial auto, as well as product liability. The study emphasizes that the increase is primarily due to the higher cost of claims rather than an increase in the frequency of claims, impacting both insurers and insured parties with continuous cost escalation.