Claims inflation likely to remain pronounced - report

Claims inflation is likely to remain a feature for the remainder of 2023 and into 2024, and insurers may not be able to increase rates enough to fully offset their rising expenses.

This is according to Bloomberg Intelligence's Europe P/C Insurance Mid-Year Outlook, which shows that, while 17 European P/C insurers' net earned premiums climbed 7.5% on average in 2022, the European building-materials index rose 16% in H1 2023.

The consumer price index for auto parts has jumped in the past three years, in a trend that looks set to continue, with input costs seemingly on an upward trajectory.

Commodities, such as steel, have been volatile in the past year with supply chain challenges remaining an issue.

Kevin Ryan, senior insurance industry analyst at Bloomberg Intelligence, said: “The shares of insurers in our European P/C peer group have posted positive returns of 1.52% in euro terms in the year to 7th June, with the recovery since H2 2020 slowing. The arrival of inflation and war in Ukraine has continued to affect sentiment this year. Despite this, the rebound of some companies' stocks reflects relief that the severity of losses from the conflict hasn't been as bad as first feared."

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