The Swiss Re Motor Bodily Injury Landscape Report 2025 finds that bodily injury (BI) claims costs are continuing to rise across Europe, despite differences in legal, social, and economic frameworks.
The report attributes the upward trend primarily to inflation, wage growth in care sectors, and changes in legal standards.
Since 2022, several regulatory changes have influenced the compensation environment. In the United Kingdom, a unified personal injury discount rate (PIDR) of +0.5% was introduced in January 2025, which is expected to simplify calculations and may reduce lump-sum settlements.
Italy implemented the Single National Table (TUN) in March 2025, standardizing non-pecuniary damage awards to improve predictability. Spain revised its Baremo tables in July 2025, resulting in higher compensation levels. The changes in Spain are estimated to add €100 million in market costs and increase severe injury claims by up to 10%.
Swiss Re’s comparative scenarios indicate significant variation in compensation for catastrophic injuries across Europe. For example, a tetraplegic case can result in compensation of less than €5 million in Central and Eastern Europe, compared to more than €18 million in the UK.
Care costs are the largest component of total compensation, accounting for about 67% in Germany, 72% in France, and 61% in the UK. Health-related inflation is also a factor, with rates reaching 6% in the UK and 2.8% in Germany in 2024.
“Higher care costs, wage inflation and evolving legal frameworks are core themes behind the continuing rise of bodily injury claims costs across Europe," said Patrick Roder, Swiss Re head of casualty treaty underwriting EMEA (pictured above). "These pressures are reshaping the economics of motor insurance, with implications for both affordability and market sustainability."
The report notes that inflation, wage growth, and healthcare expenses – particularly in aging populations – are contributing to increased BI claim severity. Between 2021 and 2024, inflation accelerated due to supply chain disruptions and higher energy prices. Swiss Re projects that inflation will remain above pre-pandemic levels, driven by structural factors such as decarbonization.
Wage growth in Central and Eastern Europe is higher and linked to productivity gains, while Western Europe sees more modest but steady increases.
Reopening of settled claims is uncommon in countries like Switzerland and the UK, but is possible in France and Belgium under medical aggravation laws. Compensation for fatalities varies, with loss of earnings being the main component in most markets, except in Italy and Spain where pain and suffering awards are more significant.
Road safety data shows that EU road deaths fell 3% in 2024 to approximately 19,800. Measures such as urban speed limits of 30 km/h and advanced driver assistance systems (ADAS) have contributed to crash reductions of up to 38% in some cities.
Swiss Re’s 2025 Behavioral Social Inflation Study also highlights that liability claims costs in the United States are rising at a pace that traditional economic indicators such as wage inflation and medical-cost trends do not fully explain. The study attributes this phenomenon, termed “social inflation,” to behavioral shifts in jury sentiment and the growing influence of litigation funding.
Swiss Re notes that rising care costs, ongoing inflation, and evolving legal frameworks will continue to drive BI claims higher. The report advises insurers to strengthen reserving practices, use data-driven monitoring, and consider reinsurance to manage volatility in catastrophic claims.
What are your thoughts on this story? Please feel free to share your comments below.
