Sunday, June 25, 2023

"Bank of England tells insurers to brace for persistent ‘claims inflation’"

We started seeing inflation considerations in renewal pricing and/or availability for Florida homeowners insurance in 2022 and 2023 and in California homeowners rates/availability this month.

From CityAM, June 23:

Insurers must rigorously assess the impact on their solvency of the rising cost of settling car, property and other claims and ensure they have sufficient reserves, the Bank of England told the sector on Friday.

The BoE said that claims inflation due to factors such as rising wage, medical and raw materials costs is expected to affect all general insurers.

“There is a risk that persistently elevated claims inflation might result in a material deterioration of solvency coverage for some firms unless they take appropriate mitigating actions,” the Bank of England said in a letter to chief actuaries of general insurers....


In Florida you also the the insurance compny litigation exposure. Almost 80% of ALL U.S. homeowners insurance litigation is in Florida.