The recent change in the inflationary regime has been rapid and rather brutal. Economies that have grown used to 1% to 2% annual inflation are now looking at rates approaching – or in – double digits. The implications of the recent increases depend significantly on the path of inflation rates from here. In this paper, we discuss:
- The current inflation situation and the latest forecasts across the United Kingdom, United States and Eurozone
- Implications for insurers of persistently high inflation rates
- How elevated inflation risks might be modelled and managed
- Further considerations around current and prospective inflation conditions
History repeating itself? The return of high inflation and its implications (including modelling) for life insurers
Current inflation rates are likely to be the highest seen for a generation, and the ensuing effects could have a profound impact on life insurers.
Thomas Bevelsborg, Jessica Crowson, Josh Dobiac, John Jenkins, Russell Ward, Freek Zandbergen, Sihong Zhu