11th May 2022

Gallagher Re’s assessment of risks caused by inflation on the insurance sector

The report has been prepared by Gallagher Re’s Strategic and Financial Analytics and Customised Solutions teams.
Key findings from this report are:
-The debate has moved on from whether inflation will spike to how long it will last. Financial markets have begun to price in more pernicious longer-lasting inflation.
-Looking across the major non-life lines of business, there is either evidence of inflation of underlying cost drivers today or an increased risk of inflation taking hold.
-Insurers are getting help from the asset side, but slowly and from a low base.
-The report outlines a number of steps insurers can take to mitigate their exposure to inflation risks. These include re-evaluating deductibles on the policies they write as well as attachments on their reinsurance programmes, putting in place retrospective covers, and considering structured reinsurance solutions in order to reduce spend, if faced with higher reinsurance prices.

Download the full report at: https://www.ajg.com/gallagherre/news-and-insights/2022/may/risks-caused-by-inflation-on-the-insurance-sector/

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