In its Global Economic Outlook report for 2023 through 2025, Allianz reported that the company expects global inflation to fall to 4.3 percent in 2024, down two percentage points from 2023 levels. Despite some experts predicting disinflation next year, the current environment is still causing challenges for insurers.

“Insurance is an industry that heavily relies on predictability, and inflation introduces uncertainty into the equation, which is never good,” said Frank Sapio, regional head of claims in North America for Allianz Commercial. “As inflation rises or sinks, reserves become less accurate, which impacts the bottom line.”