Casualty claims inflation: The biggest claims risk for insurers?

Drivers, impacts and mitigation tactics

Today’s trend for claims inflation in the UK is affecting many areas of insurance, casualty in particular, and is being driven by a multitude of macro-economic as well as sector-specific factors. High energy costs, supply chain issues, the cost-of-living crisis, labour shortages and the after-effects of Brexit and COVID-19 are all pushing up the cost of claims. At the same time, legislation reforms—designed to curb compensation in some parts of the market—are triggering ‘claims building’ in other areas. It’s a challenging mix of pressures that is likely to continue for some time.

In this series of articles and podcasts, we unpack the key issues, examining the specific drivers and impacts of claims inflation in six different areas of the casualty claims space, and identify what insurers and compensators can do to mitigate the effects and protect themselves from rising costs.

Read our latest claims inflation insight

We continue to observe the trend of claims inflation in the UK, which is having a significant impact across various business lines, particularly casualty insurance. This is driven by a variety of macro-economic conditions and industry-specific factors, and expected to continue exceeding CPI throughout 2025.

Last year, we reported that claims inflation was the single largest risk for general insurers. In January of this year, the Bank of England’s Prudential Regulation Authority described the issue as continuing to be 'a significant risk for general insurers.'

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