After a prolonged period of price stability, the medium to long-term outlook for inflation is highly unclear, with far-reaching implications for risk management and underwriting. Speciality and re-insurers cannot rely on the ‘business cycle’, which is now highly uncertain, given the combination of geopolitics, fast-shifting demographics, the transformation to a zero-carbon economy and a profoundly difficult outlook for fiscal and monetary policies. Insurers must prepare for greater differences in inflation rates between countries and sectors. They require greater sector and country-specific expertise to navigate this more unpredictable, differentiated environment.
