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Risk in Context Podcast: Assessing and addressing the impact of social inflation

Social inflation remains most prevalent in the US, its impact is being felt in several other countries, requiring all organizations to take action to protect their business.

05/15/2023 · 3 minute read

The increasing frequency and severity of nuclear verdicts is threatening the financial health of businesses, while the high claim payouts are worrying underwriters. And although social inflation remains most prevalent in the US, its impact is being felt in several other countries, requiring all organizations to take action to protect their business.

In this episode of Risk in Context, Dan Aronson, Marsh’s US Casualty Practice Leader, speaks with Chetna Gulati-Kapoor, Senior Claims Advocate within Marsh’s International Claims Solutions Division, William Liebler, Chief Claims Officer for the US, and Michael Snyder, Senior Casualty Broker within Marsh’s US Casualty Practice, about the issues contributing to social inflation and its potential impact on companies. They also share actions that organizations should consider in order to mitigate and manage their risks, including the threat of nuclear verdicts.

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Key takeaways

Social inflation is impacting total cost of risk.

Outsized jury awards are affecting insurers’ profitability, and may lead to increased insurance costs even for organizations that have not had a nuclear verdict.

Early intervention is key to managing potentially difficult claims.

Claims, especially volatile ones, can change rapidly. Early broker involvement and communication with insurers is critical to managing overall cost of risk.

Focus on your ESG posture.

Corporations should strengthen their environmental, social, and governance commitments and demonstrate they are good corporate citizens by investing in their local communities to mitigate the risk of a nuclear verdict.

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