Debt Ceiling Debate Adds Heat to P/C Insurers’ Replacement Cost Woes (The Triple-I Blog)

Debt Ceiling Debate Adds Heat to P/C Insurers’ Replacement Cost Woes

Wednesday, May 31st, 2023 Insurance Industry Liability Property

Uncertainty spawned by the debt ceiling debate will likely exacerbate the replacement cost inflation that has been putting upward pressure on property/casualty insurers’ loss ratios -- and, ultimately, consumers’ premium rates, according to Triple-I’s chief economist.

‘Whether or not we go to five, 10, 20 days -- or if we don’t have a shutdown at all -- this signals to the market a dysfunction in terms of government operations,’ said Dr. Michel Léonard, Triple-I chief economist and data scientist in an interview with Triple-I CEO Sean Kevelighan. ‘That leads to higher interest rates…which fuels inflation and reduces growth.’


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