Insurers have ‘big tool kit’ at their disposal to respond to inflation

Written by Adam Cadle

05/07/2022

Insurers have a “big tool kit” at their disposal to respond to inflation, for example through inflation-linked investments, reserve adjustments, repricing of risk, product innovation, productivity increases and loss prevention, the annual meeting of the Geneva Association Economic Forum (GAEF) heard recently.

The meeting convened more than 20 members of the GAEF Network, comprised of chief economists and chief strategy officers from the world’s leading insurers and reinsurers.

Seession chair and director of the SCOR Foundation for Science Philippe Trainar commented: “Strategic choices are important in a context of changing inflation regimes and faster drift of claims’ costs compared to inflation commonly measured by consumer prices.”

Allianz chief economist Ludovic Subran said “central banks now have to put the inflation genie back in the bottle by tightening monetary policy fast and purposefully”.

“This will not be without some havoc. In addition, we cannot solve the inflation problem with monetary policy alone: fiscal, trade, sectoral, competition and labour policies also need to be put to work.”

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