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Rising inflation could push up loss costs, premiums: Gallagher



Rising inflation, if undiminished, will push up loss costs and ultimately must be passed on through premium increases, Arthur J. Gallagher & Co said in a report released on Tuesday.

While market conditions have begun to stabilize, the complicating factors of social inflation, storm losses and general inflation continue to affect the overall insurance market, Gallagher said in his spring / summer insurance market report.

With the increase in inflation, claims costs increase within several coverage lines including commercial cars and real estate and will probably also become more expensive in general liability, Gallagher said.

Social inflation ̵

1; the trend of rising insurance costs due to increased litigation, plaintiff-friendly judgments and so-called “nuclear” jury awards – also shows no signs of abating, and litigation financing is an additional concern for insurance companies, Gallagher said.

Overall, interest rate hikes have slowed somewhat and are expected to continue to slow on many routes throughout 2022, according to the report.

Gallagher’s US customers saw an average price increase (rate plus exposure) of 8% across all lines in the first quarter, Rolling Meadows, the Illinois-based real estate company, said in the report.

Cyber ​​continued to be the exception, with a median increase in the first quarter of 37% and 88.4% of US customers saw an increase. Cyber ​​premiums increased across the board, regardless of industry sector or organization size, Gallagher said.

Workers’ compensation levels showed relatively unchanged prices, with a median increase of only 0.6%.


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