Insurers have been told recent jury verdicts related to alleged harms from addictive software design have drawn attention to a rapidly evolving area of liability, creating new risks.

New analysis by Moody’s has warned addictive software design lawsuits may represent an early warning of broader liability accumulation for casualty insurers, echoing patterns seen in past mass‑tort events where exposure builds years before claims appear in loss data.

The company’s analysis explained for many observers, these cases feel new, driven by unfamiliar technologies and a widening set of defendants.

For casualty insurers, however, novelty is not the central issue. The more consequential question is whether these cases reveal a familiar pattern of liability accumulation that begins well before risk becomes visible in historical loss data. By the time litigation begins, let alone scales up to thousands of cases, underwriting and portfolio decisions are often already in place. That is why earlier visibility and action matter.

It added: “Across major liability events over the past several decades, the path from early signal to mass litigation has followed a consistent trajectory:

• New products, materials, or technologies are adopted at scale.
• Exposure accumulates quietly across casualty portfolios before the risk is well understood.
• Scientific research raises questions about how these new products cause harm.
• Regulatory and policy attention follows.
• Legal theories develop that tie design choices or use patterns to alleged injury.

“Only later do lawsuits and insurance claims surface in volume, and only later still do courts begin testing those theories.

“This pattern has played out in asbestos, opioids, per- and polyfluoroalkyl substances (PFAS), and other science‑driven liability catastrophes. In each case, exposure existed for years before it became visible through loss experience. When litigation accelerated, insurers often found themselves constrained by underwriting decisions made under earlier assumptions, carrying concentrations they did not intend to hold.”

Moody’s added for insurers it requires:

• Identify emerging liability risk signals before litigation and claims begin.
• Assess where correlated exposures may be accumulating across portfolios, lines, and sectors.
• Inform appetite, terms, and underwriting decisions with a forward‑looking view of risk.
• Manage emerging risks as strategic portfolio questions, not just future claims problems.

“Historical loss experience remains essential for claims management and reserving, but it tells insurers where litigation has already happened, not where liability risk is building,” the analysis added. “In emerging, science‑driven liability risks, waiting for loss data means waiting too long.

“This current wave of addictive software design litigation is a call to action. Insurers should assess whether similar exposures already exist in their portfolios, stress‑testing accumulation across lines and sectors, and re-examining underwriting assumptions made when these risks were less visible.

“That requires a forward‑looking, science‑based view of liability risk.”

While recent jury verdicts have drawn attention to these cases, Moody’s argues the greater risk for insurers may lie in earlier scientific, regulatory, and legal signals that suggest exposure could already be embedded across portfolios.

“Across major liability events over the past several decades, the path from early signal to mass litigation has followed a consistent trajectory,” Moody’s said, noting that exposure often exists long before it becomes visible through claims experience.