Navigating High-Inflation: Tactics for Actuaries

In the wake of the recent inflation surge, how can insurance professionals keep up with the changing trends and proactively address the challenges? What are the lasting effects of enduring inflation and how does it reshape their strategies? Insurers are confronted with the daunting task of setting prices today for potential future costs, as the future appears markedly different from the past. This presents a heightened risk of pricing errors. Complicating matters further, various cost components that insurance companies are exposed to are affected by inflation, and customer and market behaviors are prone to rapid changes during periods of high inflation.In this talk, we will dissect the intricate landscape of persistent inflation, focusing on the unique hurdles it poses for insurers. Additionally, we will explore innovative strategies to navigate them, including improving estimates of future inflation, utilizing scenario analysis, adjusting the product offering, utilizing a credibility approach, and improving time to market.