Social inflation refers to the phenomenon of rising litigation costs, higher jury awards, and broader contract interpretations that increase insurers' liabilities beyond their original expectations. Social inflation can have a significant impact on reserve adequacy. In this paper, we demonstrate how Milliman’s benchmark calibration applied to Lloyd’s aggregate data can provide valuable insight to overcome important challenges faced by reserving actuaries, discussing the following:

• Deterioration of years of account (YoA) 2015 through 2019
• Social inflation: The driver of adverse development
• What can we learn from this?
• The most recent observations for the least mature YoAs
• Takeaways