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Digital EditionMedical Malpractice Claim Severity Escalating as Social Inflation Drives Casualty Costs Higher
Medical professional liability has emerged as the most severity-pressured line in casualty insurance, with average unpaid severity per open claim reaching $151,768 in accident year 2018 — the highest figure across all casualty lines examined — according to a research analysis published by S&P Global Market Intelligence.
While newer accident years show lower absolute severity figures, the analysis cautioned that this reflects claim immaturity rather than improvement, as a meaningful share of ultimate losses remain unpaid and carried reserves are subject to upward revision.
The S&P analysis, built from Schedule P incurred and allocated loss adjustment expense data, found that average unpaid severity per open claim increased across accident years 2016 through 2022 in other liability occurrence, commercial auto liability and product liability as well. But the drivers behind medical professional liability’s trend differ in character, the report said, with social inflation continuing to reprice the cost of litigated outcomes while third-party litigation funding lengthens litigation and raises settlement targets.
Litigation Finance and Nuclear Verdicts Reshape the Severity Landscape
The forces compounding medical malpractice severity extend well beyond general economic inflation, the analysis found. Median awards for major cases more than doubled in 2025, and exceptionally large verdicts became increasingly common. Attorney advertising has further intensified the claims environment.
Data from the National Practitioner Data Bank reinforced the trend. When adjusted for inflation, physician-related payments of $500,000 or more accounted for 36.5% of all payments in 2024 — a new high, S&P found. Much of the recent upward movement has been driven by cases with payments between $500,000 and $1 million on an inflation-adjusted basis.
Leading medical professional liability insurer The Doctors Company described the current environment as “an era marked by nuclear malpractice verdicts” in its annual report, characterizing social inflation as claim costs rising faster than the broader inflation rate, the analysis noted.
