The Doctors Company is committed to commissioning independent, third-party research that examines the most pressing challenges in healthcare. Our two studies on the impact of inflation on the medical malpractice insurance industry, conducted in 2023 and 2025 by actuarial consultants using National Practitioner Data Bank (NPDB) and industrywide data, provide in-depth analysis of nuclear verdicts and other factors driving malpractice costs.

New 2025 Study

Our new 2025 study expands on the findings of the 2023 report, confirming that inflation—both economic and social—continues to threaten access to care and promote defensive medicine.

The study estimates that increasing economic and social inflation added $4 billion in insured losses and expenses incurred by physician-focused insurers, or 11 percent of booked losses for the decade ending in 2024. This is a $1.6 billion increase from the previous estimate in our 2023 study of the decade ending in 2021. 

Social inflation occurs when an insurer’s average claim amount grows faster than the overall inflation rate. When that happens, insurers are forced to increase their rates and/or decrease coverage to keep up. The studies examined loss development factors (LDFs), a standard actuarial metric, across more than a decade for physician-focused medical malpractice insurers. In theory, these factors should change little except for random variation. Instead, they have been rising.

Nuclear verdicts continue to increase at a drastic rate: The average of the top 50 medical malpractice verdicts was $32 million in 2022, $48 million in 2023, and an alarming $56 million in 2024.

“Physicians are facing rising premiums driven by both economic pressures and the continued increase in large settlements," said Robert E. White, Jr., President of TDC Group. "We will continue to research and raise awareness of this concerning trend that affects physicians and patients."

Key 2025 Study Findings

• Combined impact: Combined economic and social inflation added $4 billion in losses—up $1.6 billion from the previous estimate.
• Large settlements are rising: Reports of claims exceeding $2 million have increased more than tenfold since 1990.
• Post-pandemic surge: The frequency of high-dollar claims rebounded sharply in 2023 after a pandemic-era dip.

Third-party litigation financing—where private investors fund lawsuits in exchange for a portion of the settlement—is also emerging as a potential driver of social inflation, projected to cost insurers between $13 and $25 billion over the next five years.