CPI Inflation
Extreme Weather Events
Contractor Shortage
Away from bodily injury, we reported that extreme weather events in 2023 led to higher claims frequency and increased severity, which naturally placed pressure on insurers' profitability. That was especially prominent across personal lines cover.
As CPI inflation generally exceeded premium rate increases, that suggests claims inflation will continue to be experienced into 2025 and beyond, given higher material costs and a tight labour market persist.
The underlying challenges we outlined last year persist. The availability of quality contractors for repair and reinstatement continues to be limited, resulting in prolonged reinstatement periods and additional remediation work.
Property Damage
Further, a dearth of suitable alternative accommodation on short-term lets has meant some insurers exploring the option of alternative solutions, such as funding short-term holidays, in the absence of first-party claims settlement.
Short-Term Lets
Rising costs
(5) The Office for National Statistics (ONS) consumer price inflation (CPI) bulletin, released 16 October2024, ONS website, statistical bulletin, Consumer price inflation, UK: October 2024
Extreme Weather Events
CPI
Contractor Shortage
Short-Term Lets & CPI
Away from bodily injury, we reported that extreme weather events in 2023 led to higher claims frequency and increased severity, which naturally placed pressure on insurers'profitability. That was especially prominent across personal lines cover.
As CPI inflation generally exceeded premium rate increases, that suggests claims inflation will continue to be experienced into 2025 and beyond, given higher material costs and a tight labour market persist.
The underlying challenges we outlined last year persist. The availability of quality contractors for repair and reinstatement continues to be limited, resulting in prolonged reinstatement periods and additional remediation works.
Further, a dearth of suitable alternative accommodation on short-term lets has meant someinsurers exploring the option of alternative solutions, such as funding short-term holidays, inthe absence of first-party claims settlement.