(Article from Insurance Law Alert, October 2025)
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While the increasing incidence of excessive jury awards has been frequently observed, there is not enough scientific data explaining the factors that contribute to this trend. However, a 2025 Behavioral Social Inflation Study conducted by Swiss Re adds to the understanding of the forces driving recent outcomes in civil litigation.
The study, based on a survey of 1,150 adults in the United States, reveals that litigation is now perceived a “social norm” rather than an extreme action of last resort in resolving disputes—a view that has changed significantly over the past decade. In terms of damage awards, the data demonstrates that the majority of respondents believe that damages awarded in lawsuits are either too low or appropriate—a significant finding in terms of jurors’ perspectives during (or even before) deliberation.
Respondents’ attitudes toward corporate defendants were also noteworthy. The majority believe that large companies prioritize profit over safety and a significant percentage believe that a large corporation should be responsible for medical expenses even if not directly at fault.
Another significant pattern revealed in the study is that the severity of the plaintiff’s injury (rather than the size of the company) is the most influential factor in verdict outcome. In fact, when hypothetical scenarios included a severe injury, participants were much more likely to recommend high compensation, regardless of whether the defendant was a large international corporation or a small business.
Perhaps a less surprising trend relates to the importance of monetary anchors. In the absence of plaintiff-based anchors, damage award expectations were lower for hypothetical personal injury cases, but when a plaintiff set an anchor, the results differed dramatically. Anchors resulted in significantly upward skewed verdicts for all size companies. Importantly, counter-anchors offered by the defendants in the testing scenarios were equally impactful, causing awards to drop by 40-50% as compared to what was expected without a counter-anchor.
The study also evaluated demographic factors that affect jury damages awards, including the age, political affiliation and socioeconomic status of jurors.
From an insurance standpoint, the study not only reaffirms the concerning trend of excessively high jury verdicts but also highlights the importance of underwriting and litigation-related considerations, such as the need for thoughtful of risk assessment for small or medium sized companies facing personal injury liability and the significance of counter-anchors.
For a more comprehensive discussion of the results of the study, please see Verdicts on trial: The behavioral science behind America’s skyrocketing legal payout.