The casualty insurance sector is confronting mounting litigation costs, with jury awards reaching new highs in recent years.
Gen Re noted that in 2023 there were 89 nuclear verdicts – defined as those exceeding $10 million – totaling US$14.5 billion, the highest count in 15 years. A separate study cited by the company found that social inflation has contributed to a 57% rise in liability claims over the past decade.
According to Gen Re, these pressures have made traditional claims and litigation management approaches insufficient. Casualty lines such as auto and general liability have become frequent targets for lawsuits, with large trucking-related verdicts standing out.
Data from the US Chamber of Commerce Institute for Legal Reform showed that over a 10-year period, the average verdict in trucking litigation was US$27.5 million, with settlements averaging US$10 million.
Gen Re said litigation analytics, which applies data mining, artificial intelligence (AI), and predictive modeling to court and claims records, is increasingly being used to address these exposures by anticipating costs and case complexity.
Other industry observers note that the upward trajectory of social inflation shows no indication of slowing. The phenomenon, fueled by litigation funding, evolving jury attitudes, and a general mistrust of corporations, has been particularly pronounced in the US but is beginning to emerge in parts of Europe.
This is translating into higher loss severity for multiple casualty lines, including commercial auto, professional liability, product liability, and directors and officers coverage, with claim costs often outpacing economic inflation.
In the reinsurance market, these dynamics – combined with reserve challenges – have placed additional strain on casualty programs, prompting some reinsurers to reassess capacity and pricing strategies.
The integration of AI into litigation analytics is expanding. Gen Re said that real-time tools could soon review live court filings to identify high-risk cases immediately. Platforms such as Bloomberg Law’s Litigation Analytics give insurers and legal professionals access to datasets covering attorney performance, law firm track records, judicial behavior, and case law patterns.
These resources can be used to assess litigation risk, forecast case outcomes, and adapt legal strategies based on data-backed insights.
By leveraging these tools, attorneys and in-house counsel can compare opposing firms, evaluate judges, and track litigation patterns across federal jurisdictions. Comparative and court analytics functions enable examination of case duration, resolution rates, and jurisdictional trends.
Gen Re said such capabilities also support competitive intelligence gathering by showing litigation activity by practice area and client type, with visualization and export options for deeper analysis.
Gen Re emphasized that AI is not a substitute for licensed adjusters but can enhance their work by streamlining processes and prioritizing tasks that require human judgment. It likened the technology to a navigation system, guiding claims professionals toward efficient and informed decisions.
The company noted that insurers collaborating with technology providers such as CLARA Analytics, Lex Machina, or CaseGlide may be better positioned to manage legal risks in an increasingly litigious environment.
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