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Insurer CEOs list inflation, global instability among primary concerns


Inflation and global instability ranked among the chief concerns of insurance industry leaders speaking Thursday at S&P Global Ratings Inc.’s 38th annual insurance conference, held virtually.   

The group of CEOs also noted the impact technology has had on the sector. 

Evan Greenberg, chairman and CEO of Chubb Ltd., warned that food and energy security are going to be a major cause of geopolitical instability in the wake of the Russia-Ukraine conflict, as energy shortages result from the withdrawal of Russian energy supplies, for example. 

“As we look out at the macro environment, the world is a riskier place,” said Richie Witt, CEO of Markel Corp., speaking on a CEO panel following Mr. Greenberg’s fireside chat. 

Mr. Greenberg suggested we may be heading toward a period of “stagflation” in which inflation is more persistent and stubborn, and that the U.S. Federal Reserve Bank may be “behind the curve” in addressing the issue.  

Claims inflation on the liability side, Mr. Greenberg added, may increase as court systems continue to reopen after COVID shutdowns. 

Insurers must be concerned about both cost of good inflation as well as social inflation, which can affect both pricing and reserve adequacy, said Mr. Witt. 

Jack Roche, president and CEO of The Hanover Insurance Group Inc., said the insurer is focused not only on loss trends but also leading indicators to determine how inflation is affecting the business. 

Inflation can effect some lines more than others, said Kristof Terryn, CEO of Zurich North America, part of Zurich Group. In workers compensation, the relevant variable is medical inflation, which has seen slightly lower cost inflation than the more general Consumer Price Index.  

Property markets, however, have chafed more severely under both general inflation and supply chain issues, Mr. Terryn  said. 

Technology is not the future of insurance but the present, according to Mr. Greenberg. 

“The tools, technologies and capabilities that the era of digitization has brought are here and now to improve how every insurance company does its business,” he said, adding tech will not change “what we do, but how we do it.” 

Zurich North America has a long-term strategy of investing in technology and data “and making our portfolio more efficient,” said Mr. Terryn. 

Mr. Roche sees tech as a pressing need, saying insurers “must make more meaningful progress over the next five years in terms of creating real efficiencies and better serving customers.”