In calendar year 2024, U.S. P&C carriers recorded $15.8 billion in adverse prior-year development across casualty lines. The highest figure on record for those segments. More than double the $3.7 billion recorded the year before.

The industry’s response has been consistent: better claims management, stronger defense counsel networks, tort reform advocacy, and sustained rate increases. All of it aimed at the plaintiff bar, the litigation funders, and the jury box, but the evidence points somewhere else.

Nuclear verdicts surged 116% in 2024 to $31.3 billion in total damages. The median award reached $51 million, up from $21 million in 2020. Thermonuclear verdicts exceeding $100 million jumped 81% to 49 cases. Five surpassed $1 billion. These numbers have reshaped the casualty loss environment in ways that most carriers and most actuarial models were not built to track.

Hard-market accident years 2021, 2022, and 2023 are developing adversely despite double-digit rate increases. In every prior hard market, elevated pricing led to conservative initial reserves that improved over time. That pattern has broken. The Casualty Actuarial Society issued an explicit warning in 2022 that standard reserving methods produce biased estimates when jury behavior shifts structurally, yet the industry continued to use the same methods.

In July 2025, Everest Group’s Acting CEO told investors that the company’s U.S. casualty loss development was consistent with expectations and that the reserve position of the Insurance division was adequate. Three months later, Everest booked a $478 million net reserve charge, purchased a $1.2 billion adverse development cover from Longtail Re to shield $5.4 billion in subject reserves, and announced the exit of its global retail insurance business.

Everest is the industry’s most visible example of what happens when a pricing model cannot distinguish between a cyclical claims problem and a structural measurement failure, but it’s not the only one.

Some firms saw this coming. Their response had nothing to do with claims management.

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