Can Artificial Intelligence Help Insurers Defend Against Soaring Nuclear Verdicts

Can AI Help Combat Nuclear Verdicts?

Massive jury awards continue to rise across the US, pushing liability costs higher and forcing insurers, corporations, and defense counsel to rethink strategies. Despite ongoing state-level tort reforms, “nuclear” verdicts—those with multi-million dollar sums—remain a pressing challenge. One emerging approach involves leveraging artificial intelligence to better predict and manage these high-risk cases.

Using AI for Early Intervention on High-Risk Claims

Advanced analytics now enable insurers and third-party administrators to quickly assess and triage claims that pose the greatest risk. For attorney selection, data-driven scorecards rank lawyers based on win/loss records, cost efficiency, case duration, and performance in specific venues. When a case could be worth millions, selecting the right attorney from the outset is critical.

Beyond attorneys, AI helps identify expert witnesses and test case themes through mock trials. By selecting jurors that mirror local community demographics and attitudes, AI analyzes feedback to determine which arguments resonate and which fall flat.

Research shows only 1.8% of litigated claims reach verdict, but those verdicts carry huge stakes. Early missteps can lead to disproportionate outcomes. That’s why the first two weeks after a claim emerges are vital. Using algorithms trained on hundreds of thousands of claims, some firms now flag cases likely to result in severe outcomes. These flagged claims then follow specialized workflows involving top adjusters, experienced defense counsel, and tools such as jury consultants and focus groups, even before litigation begins.

An AI Arms Race with the Plaintiffs’ Bar

Plaintiffs’ attorneys often invest heavily from day one, sometimes backed by third-party litigation funding. They don’t wait to see if claims will settle but spend on witness canvasses, accident reconstruction, and social media digs. They also use analytics to refine venue selection, model jury attitudes, spot recurring relationships between medical providers and counsel, and price settlements with funding in mind.

Early identification of funded cases is now a priority for carriers. Defense teams that delay involving top experts until litigation intensifies may fall behind. When a high-stakes claim surfaces, defense should be willing to invest in positioning the case properly from the start.

Insurance Industry Under Pressure

In 2024, US courts issued 49 verdicts exceeding $100 million—almost double the previous year—with five surpassing $1 billion. The median large verdict climbed from $44 million to $51 million. Social inflation, the trend of rising claims costs driven by legal and societal factors, is estimated at around 7% annually.

• Carriers are responding by lowering per-risk limits in high-exposure venues and stress-testing portfolios for verdict inflation.
• Claims playbooks are evolving to detect third-party litigation funding earlier.
• Reinsurers are tightening capacity and adjusting pricing on casualty catastrophe layers.
• Tort reforms in states like Florida and Georgia have reduced lawsuits by nearly 30%, with insurers filing rate reductions and more market entrants.

Despite reforms, nuclear verdicts persist due to factors like rising anti-corporate sentiment, aggressive attorney marketing, and increased attorney representation rates in liability claims. These verdicts result from multiple causes, and legal ecosystems take time to stabilize after reforms.

Looking Ahead: The Role of Technology

While the litigation environment remains challenging, there’s cautious optimism for improvement in the coming years. Meanwhile, insurers must integrate technology as a core part of their strategy. Predictive analytics can identify high-severity cases early, and decisive action within the first two weeks can mitigate the risk of nuclear verdicts.

Adopting these data-driven approaches equips defense teams to act proactively rather than reactively—potentially saving millions and reducing liability exposure.

For insurance professionals interested in enhancing their skills with AI and analytics, exploring specialized courses can be valuable. Resources like Complete AI Training’s course catalog offer practical knowledge tailored to the insurance industry.