Although social inflation was on the agenda during most U.S. property and casualty insurers' recent earnings calls, the issue has consistently been front and center for Travelers Cos. Inc.

CEO Alan Schnitzer made pointed remarks on the subject during the company's two most recent calls. During the third-quarter 2019 call, he called out "a tort environment that has deteriorated beyond our elevated expectation," then said three months later, during the fourth-quarter call, that Travelers had "responded assertively" to the issue "yet it's continued to come in a little bit worse than our expectations."

The concern over social inflation, which sums up issues such as increased losses due to legislative, judicial and social changes, goes beyond Travelers, according to Jim Whittle, vice president and counsel for the American Property Casualty Insurance Association.

"Everyone is looking at their portfolios very carefully to discern where these trends are and to discern what may be driving these trends," Whittle said in an interview. "They have obligations to make sure that they're doing an excellent job of preserving value in these companies."

Whittle said the association has looked at the trends in jury awards and found that they have gone up 300% over the past six years, adding that Schnitzer was right when he said during the third-quarter call that "the broken system imposes a tort tax across society."

"I think what we're seeing now is sort of a change, almost an acceleration of a lot of things that go into [social inflation]," said Whittle, who included litigation financing and jury anchoring (the practice of setting a high initial bar for proposed damages) as being among the issues that play into the broader concept of social inflation.

Travelers' upfront attitude about social inflation has been well-earned, according to Piper Sandler analyst Paul Newsome. He said the company has had "more than its share of inflation" from its commercial auto lines and has endured earnings shortfalls attributed, in part, to social inflation.

"By their very nature, they're a big broad-based company, so there's some credibility to their data," Newsome said in an interview. "I don't think they're being affected more than others. The debate is, is what is happening to Travelers more or less of an industry issue?"

The likely answer to that question is "more," considering how often social inflation was a topic of conversation on fourth-quarter earnings calls.

CEO Christopher Swift said during Hartford Financial Services Group Inc.'s call that he expects social inflation will affect most carriers to a varying extent, while John Doucette, reinsurance CEO for Everest Re Group Ltd., said the company sees the topic as a long-term issue and has been factoring the trend into its pricing and underwriting for several years.

Whittle said the industry has supported efforts to change the legal system, which he said needs to continue.

"I think there are challenges throughout the country to the rules that apply to the civil justice system that really need to receive a lot of attention from policymakers so we can be sure to be able to create a balanced, fair system for handling liability issues," Whittle said.