From: Captive International
By 2040, social inflation and other trends will help push up liability premiums to $583 billion, accounting for 13% of the global property and casualty market, Swiss Re has predicted.
According to the reinsurer, premiums will soar 150% as liability exposures grow. While economic development remains the strongest long-term driver, the growth of liability risk has continued to outpace it, the analysis finds.
“Historically, liability claims have displayed a strong cyclical nature, but notably, on average, they have also grown faster than GDP,” the analysis notes. This claims inflation in excess of the inflation driven by economic growth effects is referred to as ‘social inflation’,” it states.
“We expect that social inflation will be an important driving force for liability exposures over the next 20 years and will lead to premium volume expansion in excess of the rate of economic growth.”