Insurers ‘create new infrastructure’ to track claims inflation

“Insurers have created new infrastructure to be able to keep close track on their claims inflation,” according to Dirk Spenner (pictured), managing director of Gallagher Re.

Spenner’s comments came as he spoke in an exclusive interview ahead of taking to the stage at the Intelligent Insurer's Re/insurance Outlook Europe event, June 19–20, in Zurich.

He highlighted quick claims settlement and negotiating fixed price contracts for repairs and labour as two ways insurers are combating the inflationary pressure of claims on property insurance.

Spenner said that cedant clients have “done a lot of work” on understanding the dynamics of inflation to minimise the impact it has on their portfolios, and subsequently, the exposure that reinsurers are carrying.

“Contracts might be higher in cost than in previous years.” Dirk Spenner, Gallagher Re
“One of the very simple facts of life is that a quickly settled claim is a cheap claim, and that holds true for most of the experiences that we all have, over many catastrophe events.

“In some cases clients look to settle claims very quickly, and at a competitive level, to avoid prolonged arguments or negotiation with policyholders. This might well be advantageous for not just the insurer, but also the reinsurer,” he said.