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Home My WebLink About20241017PAC to Staff 97-2 Attachment - MMC 2024 Social-Inflation.pdf Inflation terminology in insurance Social inflation is a subset of excess inflation Claims inflation Claims .1p Excess inflation Is the change in the claims cost level of a like for like policy in an over time. Like for like means having consistent policy wording, exposure and Inflation level of coverage. Economic inflation - Changes in claims costs as captured through published economic — indices relevant to a (re)insurer's mix of business. Typically, this is LL Social inflation inflation in the cost of a basket of selected goods and services or , average wage costs, which are captured in price and wage indices. Excess inflation Changes in claims costs beyond what is captured in economic indices, including factors which are specific to a (re)insurers' business and including social inflation. E.g. emerging risk from new Economic inflation materials, medicines and technologies; changes in the legal environment; evolving social attitudes towards claiming; and political developments. Social inflation A subset of excess inflation, which more narrowly pertains to claims inflation as a result of societal trends. 00 Marsh Llyod's definition 1 Some articles on some of the nuclear verdicts we have seen in the recent past (including the Ford case) • Ford to appeal $1 .7bn verdict against it in Georgia truck crash case I Ford I The Guardian • Punitive Damages: The Impact of the Ford Nuclear Verdict - Setliff Law, P.C. • Securitas to Pay $517M in Surfside Condo Collapse Settlement - Security Sales & Integration • Fed Ex Loses Bid to Undo $366M Racial Bias Verdict, Files Appeal (insurancejournal.com) • Charter Spectrum Hit With $7.3B Verdict in Texas over Murder of 83-Year-Old (insurancejournal.com) • Miami Jury Orders Bar That Served Drunken Driver to Pay $96M in Damages (insurancejournal.com� • Could your business survive a nuclear verdict? I Marsh • Impact of social inflation on business I Marsh • "Swiss Re Webinar: Social Inflation in Europe" (simplex.ty) 00 Marsh 2