A new report from Conning, License to Litigate: Emerging Trends in the Liability Insurance Industry, provides an in-depth analysis of the evolving landscape of liability insurance. The report highlights how insurers are navigating rising jury awards, nuclear verdicts, and disruptive new threats that have reshaped traditional risk management strategies.
“The liability landscape is shifting in an alarming fashion, with social inflation, technological disruption, and systemic cyber risks driving volatility,” said Julia Brinson, a Vice President of Insurance Research at Conning. “Insurers must refine their strategies to maintain stability and drive sustainable growth, requiring innovation, collaboration, and a willingness to rethink traditional risk management approaches.”
The study identifies several key trends influencing the market in 2025:
- Litigation Hotspots and Social Inflation – Jury awards continue to escalate, with California, Florida, New York, and Texas emerging as key battlegrounds for high-stakes litigation. Plaintiffs’ attorneys are leveraging sympathetic juries and favorable legal climates, putting immense pressure on insurers.
- ESG-Related Liability and D&O Challenges – Environmental, social, and governance (ESG) risks are becoming a major concern for insurers, particularly in the directors’ and officers’ (D&O) liability space.
- The Role of Social Media in Litigation – Platforms such as X (formerly known as Twitter) and TikTok are amplifying plaintiff-friendly narratives, making it increasingly difficult for insurers to mitigate reputational and financial risks. Jurors enter courtrooms already influenced by viral stories, which can drive larger settlements and higher awards.
- Reinsurance and Capacity Constraints – Social inflation and excess-of-policy-limits claims are straining reinsurers, leading to tighter underwriting and shifts in coverage structures.
- Tort Reform and Industry Collaboration – Pennsylvania and Georgia are working to curb excessive litigation practices, but meaningful change will require insurers to adopt proactive claims strategies and enhance industry-wide cooperation.
Beyond identifying these risks, the study emphasizes the need for insurers to adopt a forward-thinking approach. The liability insurance sector is no longer just reacting to change — it is actively shaping the future of risk management.
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