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Insights from the Gen Re – Claims Forum 2026 on the Inflation of Liability Claims
The inflation of liability claims – particularly bodily injury claims – has been a topic of discussion in the insurance industry for years. While cost increases in property heads of damage can largely be explained by macroeconomic inflation trends, the analysis is considerably more complex for bodily injury claims. The question here is whether this is a classic inflation-driven phenomenon or whether structural changes are having a lasting impact on claims amounts.
Answering this question was at the heart of the Gen Re–Claims Forum 2026. Possible causes of the observed cost development were analysed based on keynote presentations and an accompanying Slido survey among the liability claims heads of leading German insurance companies who were present at the Claims Forum. The survey does not claim to be complete or representative, but it does provide a broad, practice-oriented picture of the views of the market participants in attendance. While there was broad agreement that claims costs are rising, the forum produced differing views on the underlying causes.
This article classifies the most important findings from the Claims Forum. The focus is on whether rising bodily injury claims can still be explained as inflation – or whether the cost structure is changing permanently.
Claims data indicate that claims amounts of severe and complex liability claims have increased significantly in recent years. In motor third-party liability in particular, large losses are increasingly reaching double-digit million euro amounts. What is striking is the growing number of individual bodily injury claims with very high long-term costs, which now have a much stronger influence on claims development than they did just a few years ago.
An exemplary claim illustrates this development: a severe bodily injury claim from 2024 resulted in a total claims burden of more than EUR 16 million due solely to annual care costs of around EUR 500,000. The case highlights a central characteristic of severe bodily injury claims: the largest costs do not arise in the year of loss, but over decades.
At the same time, there is no linear increase in claims costs. Rather, the data have recently shown a partially reduced dynamic. The development cannot be attributed to a single driver. Instead, several factors are simultaneously affecting claims costs.
The starting point for the discussion at the Claims Forum was the specific cost structure of bodily injury claims. This is illustrated by the analysis of large bodily injury claims from Gen Re’s reinsured portfolio, shown in Figure 1.
Source: Gen Re claims database, 2025 analysis
In large claims, around three quarters of total costs relate to long-term items such as:
By contrast, one-off cost items such as pain and suffering damages or initial medical treatment costs play a comparatively minor role.
It is precisely this duration that makes bodily injury claims so volatile. Even if care costs or loss of earnings increase only moderately each year, the total claim nevertheless grows considerably over time.
A more detailed look at the cost structure shows why claims expenditure is currently developing so dynamically.
Care costs represent the dominant cost block in severe bodily injury claims and are developing particularly dynamically for several reasons. In addition to rising personnel costs, collective wage adjustments, and the shortage of skilled workers, investment costs borne by nursing home residents also increase costs in the inpatient sector. These costs are regularly passed on to residents and increase co‑payments in nursing homes. Accordingly, the co‑payment in nursing homes is rising significantly: according to Statista, based on data from the Verband der Ersatzkassen (vdek), the average monthly co‑payment for a stay of up to twelve months increased from EUR 2,871 in July 2024 to EUR 3,108 in July 2025, corresponding to an increase of around 8 percent.1 Precisely because these costs are incurred over many years and can vary considerably by region, they have a direct effect on long-term claims expenditure.
Cost development in the healthcare system is partly dampened by regulatory mechanisms. Cost increases arise not only directly, but also through longer treatment periods, insufficient capacity, and delayed rehabilitation.
Medical progress means that injured persons can receive long-term care, and often for longer, than in the past. While this improves the quality of life of those affected, it also increases treatment costs incurred over their lifetime.
Legal and social developments are leading to an expansion of heads of damage, particularly in the area of participation and so‑called additional needs. The “Bundesteilhabegesetz” (BTHG – Federal Participation Act) is of particular importance here, as it has shifted the focus from mere care and compensation towards self-determination, inclusion, and equal participation. This change in perspective is increasingly influencing the adjustment of severe bodily injury claims. Benefits for assistance, mobility, accessible housing, or participation in working and social life are now often considered more comprehensively and can cause significant additional claims expenditure over long periods of time. The BTHG therefore affects not only individual heads of claim, but also structurally changes the framework conditions for severe bodily injury claims.
A further aspect is the increasing decoupling of cost development from general inflation, as shown in Figure 2.
Source: Leo Ronken, based on Statista and AOK
While consumer price inflation has normalised again after the years 2021 to 2023, the cost components of bodily injury claims continue to show their own dynamic.
This development is largely due to the structure of claims costs: bodily injury claims consist predominantly of services, particularly in the care and healthcare sectors. These areas are subject to their own pricing mechanisms and in some cases develop independently of the general price level.
The costs relevant to bodily injury claims are therefore increasingly developing independently of general consumer price inflation. Even with moderate overall economic inflation, the cost components relevant to bodily injury claims can continue to rise significantly.
The Slido survey conducted as part of the Claims Forum provides a supplementary qualitative classification of market sentiment, as illustrated by Figure 3.
The claims heads surveyed were in agreement in their assessment of future cost development: it is currently rising, expected to continue to increase, and a decline in costs is not expected.
There was also a clear assessment of the cost drivers. Care costs and medical treatment costs were identified almost unanimously as central influencing factors, while other aspects – such as pain and suffering damages or court disputes – played a subordinate role.
In addition to the immediate cost drivers, demographic developments, medical progress, and the consequences of the shortage of skilled workers were also mentioned as relevant influencing factors. At the same time, participants pointed to internal factors, such as handling duration and the degree of automation, that can also influence the claims amount.
Although the survey does not claim to be representative, it provides an informative impression of current market sentiment: it shows a consistent picture from operational claims practice and confirms the developments visible in the data.
For the authors, the data and the discussions at the Claims Forum produce a clear picture: the development of severe bodily injury claims cannot be explained by inflation alone. There are many indications that we are currently observing a structural change in the cost drivers of severe bodily injury claims.
Key cost components – in particular care and treatment costs – increasingly follow their own dynamics and are partly decoupling from the general inflation path. As a result, historical claims patterns are increasingly becoming an unreliable benchmark for future development.
The findings clearly argue against an interpretation of cost development as being driven purely by inflation.
The inflation of bodily injury claims is real, but it is less a classic inflation phenomenon than an expression of structural changes – above all in care, medical provision, and long-term benefit items.
The rising claims amounts are shaped less by short-term price movements than by the long-term dynamics of key cost components. Large losses in particular show that it is not individual cost blocks, but the cumulative expenditure over years that is the determining factor. At the same time, these costs are increasingly decoupling from general inflation, as they arise mainly in areas that follow their own economic and regulatory mechanisms. Alongside medical progress and rising care costs, social and legal developments, particularly in the area of participation, also contribute to this structural change.
For insurers, this means that historical claims patterns alone will be less useful in the future. The key factor will be to identify the actual cost drivers at an early stage and take them into account in reserving, pricing, and claims management.
