10% Social Inflation Rate !?

This April we organized a panel at the United Insurance Network (UiN) at the event in Chicago, hosted by the largest Womens, Black, Latine, Asian, and LGBT external support groups of insurance professionals. Moderated by our CEO James Felton Keith and led by our new President of Employment Law, Dr B-A with Texas Judge DaSean Jones and the Alliant Insurance VP of Belonging & Engagement, Aaisha Hamid -- we demonstrated the cost of the new American tough of war between inclusion and exclusion.

Right to Left: Judge DaSean Jones, Dawn D Bennett0-Alexander, Aaisha Hamid, James Felton Keith

What Is The Social Inflation Rate?

According to BMO’s (Bank of Montreal) recent analysis with Swiss Re Reinsurance Institute, social inflation—the trend of rising insurance claims costs due to increased litigation, broader definitions of liability, and more sympathetic juries—is not expected to slow down in 2025. Forecasts predict social inflation could cause insurance claim costs to rise by 10% or more, threatening insurer profitability and market stability. Normal social inflation rates are ~3.5%. After the first Trump election, between 2017 and 2023 we witnessed ~7% rates.

James Felton Keith at UiN in Chicago

Per JFK "it is important to think of this rate as the Fed Rate and it will influence all prices and sales needs going forward".

To navigate this looming risk, insurers can adopt an unexpected but highly effective strategy: implementing ISO-30415:2021 Diversity and Inclusion (D&I) Service Management Standards. The Standard is a loss prevention method that ties workforce resilience to liability prices.

During the event, we demonstrated how the ISO-30415 standard is segmented and pegged to various types of insurance financial lines and how the Social Inflation Rate will impact all of them. Plainly, we have underpriced and undersold each of these 4 lines.

DEI Standard's Alignment with Insurance Financial Lines

Social Inflation: A 2025 Reality Insurers Must Prepare For

Social inflation is fueled by societal shifts: a greater public demand for corporate accountability, expanded juror empathy for claimants, and a legal environment that increasingly awards high settlements. In BMO’s words, “social inflation is structural and systemic—it’s not going away anytime soon.” Insurers who fail to adjust now may face operational disruptions, brand damage, and a volatile claims environment. As Judge Jones explains, the courts have a "damages model" that is also factored into the inflation rate. This means settlments can scale.

How ISO-30415 Helps: From Risk Management to Resilience

There was some back and forth between the DEI Pro and The Lawyers about what companies should do in this confusing Anti-DEI environment and responding to both client companies that are upholding DEI and the government-as-a-client that attacks DEI. Most outside counsels are recommending "rebranding" and a holding patter.

Dr. DA and Aaisha Hamid

The standard can be used with any language combination , like what Zurich Insurance calls "workforce resilience". ISO-30415:2021 provides a global framework for embedding diversity, equity, inclusion, and belonging (DEIB) into governance, human resources, product delivery, and supplier diversity. It isn't about public relations; it’s a business risk mitigation strategy.

Here’s how ISO 30415 directly addresses the drivers of social inflation:

1. Strengthening Governance Against Bias

The standard requires organizations to assess and correct biases in leadership, decision-making, and corporate governance. By proactively aligning leadership practices with inclusive values, insurers can build stronger reputations, reduce the likelihood of facing discrimination-related litigation, and increase trust with diverse stakeholders.

Result: Lower risk of being perceived as unfair or unethical—a key trigger for punitive jury awards.

2. Human Resources that Decrease Employment Practice Liabilities

ISO 30415’s framework for inclusive workforce planning, recruitment, onboarding, and development ensures fair treatment and equity at every employee touchpoint. This reduces employment-related claims like wrongful termination, discrimination, and retaliation, all of which fuel social inflation trends.

Result: Improved workplace equity minimizes legal exposure and strengthens employee advocacy—a shield against lawsuits and reputational harm.

3. Building Inclusive Product and Service Delivery

Under ISO 30415, insurers must evaluate whether their products and services equitably serve diverse populations. Bias in underwriting or claims processing is a growing source of class actions and regulatory scrutiny. Inclusive product design directly reduces these risks.

Result: Services designed inclusively are less likely to face legal challenges for discrimination or systemic bias.

4. Managing Supplier Diversity to Strengthen Social License

Supplier diversity requirements ensure that procurement practices reflect broader social values. This boosts an organization's "social license to operate"—the informal societal approval insurers need to survive in litigious environments.

Result: Stronger stakeholder relationships, fewer accusations of exclusionary practices, and better defense against social inflation dynamics.

Conclusion: ISO 30415 as a Critical Hedge Against Social Inflation

While traditional risk modeling remains important, insurers must evolve. Social inflation is not just about financial loss—it’s about societal expectations. Implementing ISO 30415 embeds the values that society increasingly demands: fairness, accountability, and inclusion.

By certifying operations against this standard, insurers demonstrate to jurors, regulators, and customers that they are proactively addressing the systemic risks that drive inflated claims costs. ISO 30415 isn't just compliance—it's a strategic resilience tool for 2025 and beyond.

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