Industry has ‘a huge responsibility’ to mitigate inflation-driven underinsurance and to ensure certain risks do not ‘become uninsurable’, says chief executive
Brokers and insurers have “a huge responsibility” to index risks based on increasing inflation rates, to both mitigate underinsurance and ensure that “certain risks” do not “become uninsurable and the value of insurance goes away”, according to Colm Holmes, chief executive of Allianz.
Speaking to sister publication Insurance Times, Holmes emphasised that it is essential for brokers and insurers to collaborate in order to combat the effects of rising inflation – especially as “there’s probably a lot of younger people who have never experienced inflation” before and who may struggle to understand and manage the associated fallout and ramifications.
According to figures published by the Office for National Statistics (ONS) in May 2022, inflation in the UK is now at a peak of 9%, as recorded in April 2022.
“We’re entering a period that a lot of us haven’t been in for a long time. These are the times where it’s really, really important that we work well together.”
Holmes noted that the insurance sector has a “social responsibility”, as well as a corporate one, to create solutions to market-wide problems, such as inflation – he added that relying on “too clever” government and industry reinsurance schemes is not always the answer here.
He said: “We know there’s a lot of things going on in the market right now in terms of disclosure, commission rates – particularly in the real estate area – that it’s important that we work collectively to deliver solutions to the market.
“I’ve always believed insurance has a social responsibility in the economies that we’re in, as well as a corporate responsibility, and we need to figure out how do we provide insurance solutions.
“Whether it is personal or commercial customers, our first goal should be how do we provide a solution? We can’t allow certain risks to become uninsurable [or] the value of insurance goes away.”