Product Liability Insurance, 2014-2023
| Year |
Net premiums
written (1) |
Annual percent
change |
Combined
ratio (2) |
Annual point
change (3) |
| 2014 |
$2,674,183 |
-1.6% |
134.4 |
-20.9 pts. |
| 2015 |
2,796,761 |
4.6 |
130.6 |
-3.7 |
| 2016 |
2,422,721 |
-13.4 |
124.1 |
-6.5 |
| 2017 |
2,689,115 |
11.0 |
102.1 |
-22.0 |
| 2018 |
2,794,716 |
3.9 |
122.3 |
20.2 |
| 2019 |
3,017,099 |
8.0 |
108.5 |
-13.8 |
| 2020 |
3,239,063 |
7.4 |
88.2 |
-20.3 |
| 2021 |
3,561,024 |
9.9 |
100.5 |
12.2 |
| 2022 |
4,295,605 |
20.6 |
89.5 |
-11.0 |
| 2023 |
4,444,481 |
3.5 |
99.9 |
10.4 |
(1) After reinsurance transactions, excludes state funds.
(2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration.
(3) Calculated from unrounded data.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Trends In Personal Injury Lawsuits, 2014-2020 (1)
| Year |
Award median |
Probability range (2) |
Award range |
Award mean |
| 2014 |
75,000 |
$16,000 – $400,000 |
$1 – $172,061,728 |
$1,031,742 |
| 2015 |
88,689 |
20,000 – 493,094 |
1 – 88,246,000 |
1,134,864 |
| 2016 |
100,000 |
23,000 – 529,485 |
1 – 115,000,000 |
1,354,355 |
| 2017 |
125,000 |
21,390 – 648,469 |
1 – 160,500,000 |
1,812,681 |
| 2018 |
100,474 |
22,052 – 550,125 |
1 – 247,000,000 |
1,675,013 |
| 2019 |
95,677 |
20,450 – 517,060 |
1 – 740,000,000 |
1,758,308 |
| 2020 |
125,366 |
25,072 – 613,130 |
840 – 373,763,109 |
2,448,978 |
| Overall |
$100,000 |
$20,000 – $505,000 |
$1 – $740,000,000 |
$1,479,368 |
(1) Excludes punitive damages.
(2) The middle 50 percent of all awards arranged in ascending order, 25 percent above and below the median award. The median represents the midpoint jury award. Half of the awards are above the median and half are below. This helps establish where awards tend to cluster.
Source: Reprinted with permission of Thomson Reuters, Current Award Trends in Personal Injury, 61st edition.
Insurers are required to defend their policyholders against lawsuits. The costs of settling a claim are reported on insurers’ financial statements as defense and cost containment expenses incurred. These expenses include defense, litigation and medical cost containment. Expenditures for surveillance, litigation management and fees for appraisers, private investigators, hearing representatives and fraud investigators are included. In addition, attorney legal fees may be incurred owing to a duty to defend, even when coverage does not exist, because attorneys must be hired to issue opinions about coverage. Insurers’ defense costs as a percentage of incurred losses are relatively high in lines such as product liability and medical malpractice, reflecting the high cost of defending certain types of lawsuits, such as medical injury cases and class actions against pharmaceutical companies.
Defense Costs and Cost Containment Expenses as a Percent of Incurred Losses, 2021-2023 (1)
| |
2021 |
2022 |
2023 |
| |
Amount |
As a percent
of incurred losses |
Amount |
As a percent
of incurred losses |
Amount |
As a percent
of incurred losses |
| Product liability |
$713,268 |
46.6% |
$751,333 |
46.2% |
$869,370 |
40.8% |
| Medical professional liability |
1,969,451 |
36.7 |
1,943,401 |
35.3 |
2,205,636 |
35.7 |
| Commercial multiple peril (2) |
2,272,853 |
30.0 |
2,248,506 |
22.2 |
2,724,149 |
25.5 |
| Other liability |
6,945,720 |
15.9 |
7,093,556 |
13.7 |
8,332,174 |
14.8 |
| Workers compensation |
2,593,464 |
12.3 |
2,975,641 |
13.9 |
3,085,693 |
14.3 |
| Commercial auto liability |
2,146,754 |
10.2 |
2,462,641 |
9.4 |
2,955,885 |
9.8 |
| Private passenger auto liability |
5,378,307 |
5.6 |
5,947,243 |
5.0 |
6,270,745 |
5.0 |
| All liability lines |
$22,019,817 |
11.3% |
$23,422,321 |
10.0% |
$26,443,652 |
10.4% |
(1) Net of reinsurance, excluding state funds.
(2) Liability portion only.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
