Inflation & Insurers — Recession Resilient?

Inflation & Insurers — Recession Resilient?

We’re all struggling with inflation. Some economists say it’s starting to subside but prices are still on the rise and many things consumers normally purchase have become unaffordable.

Other economists say inflation will continue, could hit double-digits and could help drive the U.S. into a mild recession by early Spring next year.

With that in mind, Fitch Ratings recently asked an important question and that question is how recession-proof is insurance. The query led to a report and that report says the property-casualty sector is “recession-resilient.”

That’s a safe declaration. Fitch’s report says in reality, P&C insurers are totally recession-proof.

This is important news. As we noted earlier, many economists predict a mild recession by Spring, and that recession will mean different things to different insurers.

Fitch Managing Director Jim Auden said all sectors of insurance are going to face challenges. Those challenges will yield different outcomes. Among the challenges is a big drop in the nation’s gross domestic product (GDP) and close to double-digit inflation.

Fortunately — Auden said — U.S. insurers have a built-in resiliency to volatility. We’ve seen that in their response to natural disasters, the almost ended global pandemic and a global financial crisis

However, this lessons learnedapproach will be put to an entirely different test that includes rising inflation, ballooning cyber risk premiums and more hurricanes making landfall over the last year,” Auden said.

Source link: Reinsurance News —

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