The Insurance Information Institute — aka Triple-I — says the economic drivers of the property-casualty insurance industry could likely expand much faster than the nation’s gross domestic product (GDP) in 2024.
Triple-I chief economist Michel Leonard, Ph.D., CBE says it might even outperform the entire economy by 2025. That’s good news after the industry underperformed for the last three-years.
Leonard says the Triple-I is now forecasting growth of 2.1%. That’s a little higher than the initial 2023 prediction of 1.9%.
“This confirms our expectation from January 2023 that the gap between P/C and overall growth would continue to narrow this year,” Leonard said. “P/C underlying economic growth should continue to improve over the next three years, potentially outperforming the wider economy by 2025.”
The report notes that between 2020 and 2023 replacement costs rose an average of 45%. Inflation went up 15% in that three-year period.
Leonard and the report say that replacement costs will slow down faster than inflation in the next three-years. However, it will take a decade of normal inflation for replacement costs to get back to pre-pandemic percentage levels.
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