Severe bodily injuries remain concentrated in a core number of major centre across the world as insurers face a range of claims challenges.

The Lloyd’s Market Association has published new analysis from the LMA International Bodily Injury Index, which found high severity outcomes are concentrated in a small number of jurisdictions.
The Index showed that the most expensive outcomes sit in a limited group of locations, particularly for life-changing injuries such as paralysis, serious brain injury and total loss of sight. This includes jurisdictions such as Canada and Australia, where lifetime care assumptions and earnings-related losses materially increase claim values.

For example, paralysis scenarios reach very high levels in the province of Ontario and the state of New South Wales compared with many European jurisdictions, highlighting how a small number of locations can disproportionately drive portfolio severity.

The index covers 96 jurisdictions in scope, with year-on-year analysis based on jurisdictions where data is available in both years for the same scenario.

With a second year of data now available, the Index is beginning to reveal clearer patterns in severity, volatility and cost drivers across jurisdictions, helping insurers sharpen underwriting assumptions, reserving approaches and claims strategies.

The Index is a three-year strategic project developed by the LMA’s International Liability Business Panel to support analysis of bodily injury awards trends across 96 jurisdictions worldwide (excluding the USA). In addition, the Index provides state-level data for Australia and provincial data for Canada.

Key trends from two years of data include:

• Minor injury costs are relatively stable in many European jurisdictions, with notable outliers
  Across several European jurisdictions, minor and superficial injuries remain comparatively contained and show modest year-on-year movement. For example, England and Wales increased by 4% from £2,924 to £3,051 for the minor injury scenario, a level broadly consistent with a number of EU jurisdictions where minor injury awards remain relatively stable and tightly bounded.

  However, the Index also shows clear outliers even for low severity claims. Hungary’s minor injury estimate rises from HUF1.5 million or EUR3.9k to HUF2.5 million (EUR6.5k), creating a materially different cost profile versus neighbouring jurisdictions. Similar divergence can be seen outside Europe. For example, New South Wales shows higher minor injury outcomes than many European markets, reflecting broader approaches to damages even at the lower end of severity.

• The gap widens sharply as severity increases
  Jurisdictional divergence becomes far more pronounced for severe injuries that involve lifetime care, long-term loss of earnings or permanent disability. For example, the amputation below the knee scenario shows multi-million outcomes in New South Wales and Ontario that are significantly higher than many European jurisdictions. This pattern accelerates further for moderate brain injury and paralysis, where lifetime care assumptions and earnings multipliers drive the majority of cost.
• Volatility is most visible in severe injury categories
  Across multiple jurisdictions, year-on-year movement is substantially larger at the catastrophic end. This has practical consequences. For example, in a jurisdiction such as Australia, a portfolio which appears manageable on minor and moderate injury claims, can become materially loss-making if it is exposed to a small number of paralysis or serious brain injury claims, given the scale of lifetime care awards.

It added interest can be a major cost escalator, with wide variation in both rate and start point
The Index highlights that interest is not a technical footnote; in some jurisdictions it can materially change ultimate cost, particularly where claims take a long time to settle or where proceedings are prolonged. Examples include:

• Argentina, where interest is stated as the active rate of Banco Nación, shown at very high levels in both years, including figures of 97% in the prior view and over 40% in the updated view, still a significant tail cost driver in delayed settlements.
• Spain, where penalty interest can apply if insurers fail to pay within set timeframes, including an example of 20% per annum after two years in certain circumstances.
• Jurisdictions that apply no interest on compensation (or effectively zero) creating a clear contrast in tail exposure.

“For insurers, this reinforces the importance of timely claims handling, particularly in jurisdictions where interest can materially increase ultimate cost,” the report explained. “It also underlines the need for careful reserving for interest and cost where claims take longer to settle.”

The LMA said the emerging trends have direct operational implications, for insurers including:

• Pricing and attachment points: higher severity jurisdictions may require different pricing adequacy tests, tighter policy limits or adjusted reinsurance structures.
• Reserving and capital allocation: volatility at the severe end increases uncertainty in ultimate loss cost, which can drive higher risk margins and more frequent assumption refreshes.
• Claims strategy: timely claims handling and early engagement are important in all jurisdictions. Where interest or penalty interest can materially increase ultimate cost, proactive case management and appropriate use of local counsel can help support fair and efficient resolution.

David Fitzpatrick, chair of the LMA’s International Liability Business Panel and Executive Underwriter at Ascot, said: “Now that we have two years of data, we can see more clearly where bodily injury exposure is concentrated, where outcomes are stable and where they are moving quickly. The Index underlines the importance of jurisdiction-specific understanding, particularly for high severity claims where differences in approach to care, earnings and interest can transform the ultimate cost.”