claims inflation

Catastrophe loss data aggregator PERILS AG has released its Industry Exposure Database (IED) for 2024, which highlights the continued impact of inflationary developments on exposures, with sums insured for European windstorm up 10.1% year-on-year at constant EUR exchange rates.

Insurance companies have lost control of their claims frequency and the use of technology enabled claims instigation practices to drive more claims through litigation has become a significant social inflationary threat to the industry, with ramifications for the reinsurance and insurance-linked securities (ILS) market, speakers explained in our latest Artemis Live video interview.

The PERILS Industry Exposure Database (IED) 2023 highlights the impact of inflationary developments on exposures, revealing sums insured for European windstorm increased by 11.7% year-on-year at constant EUR exchange rates.

In property insurance, rates are failing to keep up with inflation, according to global reinsurance firm Swiss Re, who estimates that property claims will rise by between 6% and 13% on the back of inflation, which is higher than price increases that were reported at 5% to 8%.

U.S. coastal states such as Florida, California, and Louisiana are experiencing a growing property insurance crisis that is being driven by man-made events, highlighting the need for reinsurance capital to absorb more of the risk as carriers navigate a testing environment.

The resurging incidence of cases of COVID-19 across areas of the United States could add pressure to catastrophe insurance and reinsurance market claim processes and amounts, so PCS has undertaken some research on hurricane events to show where the threat is greatest.

Having warned previously that inflationary factors will result in elevated property insurance claims, global reinsurance firm Swiss Re has now qualified this by saying that the inflationary effect of higher materials and construction prices may only last through this year.

Swiss Re has warned that insurance and reinsurance firms will face increased indemnity costs after land-falling hurricanes in the United States this year, as inflationary factors are set to drive claims amounts higher.

For our latest Artemis Live video interview we wanted to explore inflationary trends and their potential to impact on the catastrophe claims process, as well as throw up some unexpected results when losses happen. So we were joined by Mike Fulton, President of Xactware and Tom Johansmeyer, Head of PCS, to discuss inflationary pressures and […]