HomeInsuranceInflation and higher interest rates may alter P&C market

Inflation and higher interest rates may alter P&C market

A one-two punch delivered by inflation and the resulting interest-rate increases could have several impacts on Canada’s P&C sector, including on claims costs, expense ratios, investment returns and the continued viability of the current hard market.

Nearly all major industrialized economies are now wrestling with record or near-record inflation, due largely to supply chain disruptions and surging demand as national economies rebound from COVID-19 and other issues.

Earlier this year, some economists called for Canada’s inflation rate to peak with March’s 6.7% rise. But it’s since been outstripped by April’s 6.8% increase, May’s 7.7% hike and the 8.1% year-over-year rate reported in June. The most recent rise was driven largely by skyrocketing gas prices.

“The key takeaway from April’s CPI release is that inflation is spreading much more broadly, and at clear risk…

Read more at www.canadianunderwriter.ca

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