Inflation, climate change to drive higher insurance premiums; but some tail risks remain

PREMIUMS are set to rise globally, driven by rising risks brought on by climate change and inflation, said Moses Ojeisekhoba, Swiss Re global chief executive for reinsurance.

But while rising premiums paint a promising outlook for insurers, the industry continues to grapple with unknowns that could saddle them with large and unexpected liabilities, he noted. Policy language for some risks such as business interruption and cyber is expected to come under scrutiny in efforts to limit exposures.

Still, the overall outlook is positive for life and non-life sectors. “The main reason is that exposures are growing. The value of properties rises with greater urbanisation and inflation. Whatever item you have today, the cost of replacing that item tomorrow is higher.