This paper discusses the combined impact of social and economic inflation because the study’s actuarial methodology cannot differentiate between underlying drivers. Social inflation is defined as “excessive inflation in claims” for the purposes of this paper and is a term primarily used by insurance industry professionals. It is closely related to “legal system abuse,” which the Insurance Information Institute (Triple-I) defines as policyholder or plaintiff attorney practices that increase the costs and time required to settle insurance claims to the detriment of consumers. This paper will use social inflation because its definition better aligns with this study’s actuarial methodology.
This research paper is a collaboration between Triple-I and Casualty Actuarial Society (CAS).
