Inflation pinches pricing power, but insurers can't ease off rates: AXA
Inflation could begin to pinch the pricing power of insurers on retail markets as customers start to face difficult decisions for their weakened purchasing power, AXA CEO Thomas Buberl (pictured) has said.
"We will certainly enter in a time now when it will become more difficult, because certainly the end-consumers are feeling price increases from everywhere, so it will become more challenging," Buberl said in an interview for CNBC on the side-lines of the Davos summit.
But Buberl swears off suggestion that the industry might allow itself to fall behind the curve on pricing.
Asked if the insurance industry should accept a hit to profits after a long market hardening in the name of societal solidarity, Buberl turns the tables.
"We are in a business that is in the middle of society," Buberl said. Individuals in need require the support of as many of their neighbours as possible, in this case via insurance premiums.
"So, what we need to do is insure everybody," Buberl said. "This can only work if the financial balance in that system is kept and therefore when the price of risk goes up."
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