Pricing in an Age of High Inflation
In this article, we look at how insurers can deal with the challenges posed by high inflation. Insurers in this high-inflation environment are exposed to cost increases and must set prices today for costs that may occur in the future. In a period of high inflation, the future looks less like the past, and the risks of pricing errors are raised. Different costs that an insurance company is exposed to experience inflation at different rates, and customer and market behavior is also likely to change more rapidly during periods of high inflation. The article outlines several strategies that insurers can use to deal with high inflation, including improving estimates of future inflation, utilizing scenario analysis, adjusting the product offering, utilizing a credibility approach, and improving time to market.
This is a joint-authored paper between Advisense and AKUR8.
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