Recently high inflation has hit the headlines. Rising prices have been affecting general insurance reserving. After years of benign inflation in many classes, intrinsically projected forward by chain-ladder-based techniques, the switch to high inflation is something to be acutely aware of this year. Have you considered the contrast between historical inflation and future prospects in these uncertain times? What claim costs are rising in your lines? As always communication is key and scenarios considering the specific pressures on case reserves or increasing payment amounts could help inform key decision-makers. This matter will be considered by the Regulatory Board at its February meeting but if you’d like to provide your thoughts please contact the Communities Engagement team.
