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