Claims inflation: Catastrophic Injury & Large Loss

The impact of claims inflation is particularly acute in the Catastrophic Injury and Large Loss arena. Even relatively small movements in inflation, salaries, goods and services can bring large outputs in damages when a compensation package is required to meet a claimant's needs for the remainder of their life.

The last two to three years have seen increasing inflation – in 2022/23 in particular - coupled with a worsening economic outlook. Salaries have risen in response to the cost-of-living crisis, industrial action, and increased competition as a result of employee shortages brought about by the 'Great Resignation'. Supply chain issues due to Brexit, the Suez Canal blockage and war in Ukraine have caused increases in the cost of energy, goods and materials.