Since reinsurance rates sit below the surface of nearly every P&C policy, as reinsurers struggle with flagging profitability, their struggles promise to play an even bigger role in the cost of nearly every policy in the near- to medium-term. (Credit: sitthiphong/Adobe Stock)
Continuously rising inflation, paired with the subsequent rising interest rates used to combat that inflation, stands to have a strong impact on most lines of property and casualty insurance in the near- to medium-term.
The easy, short answer to how inflation will impact P&C insurers is that inflation increases the value of each loss, which leads to bigger payouts. Those payouts have to be recouped through higher premiums, leading to higher insurance costs across the board.
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