Insurance prices for companies may rise in the coming months

Insurance and reinsurance Peruvian companies are suffering from the severe inflationary crisis that the world is facing. Problems in the supply chain, extended replacement times, plant closures in China, and conflict between Russia and Ukraine; are just some of the factors that drive up prices and therefore generate serious impact on insurance policies of large, medium and small companies operating in the country.

For Adrian Ward, Head of Accommodation at Lockton Peru, the inflationary context affects the value of the insured assets that companies maintain in their insurance companies.. For this reason, companies run the risk of falling into underinsurance, a situation that occurs when the declared value of an insured asset is less than its true value. Thus, at the time of an accident or loss, the interest that was not claimed will be deducted by applying this factor in compensation.

Given this, the Lockton Peru expert notes that it is vital to verify the true value of these assets with an appraiser so that the insurer is given an adequate amount in the current conditions. Similarly, the inflationary context also affects costs in the reinsurance market. “Growth ranges from 3% to 20%. If the company is only affected by inflation, the range would be between 3% and 7%. However, if it is a company with a high accident rate and high losses, they have increase levels of up to 20%.”, – said the head of the accommodation department of Lockton Peru.

How to act in the long term?

In the middle of all this panoramaThe most affected industries, given the high risk, are the mining, energy and oil industries.because they need very large sums insured. Similarly, but to a lesser extent, there are commercial, industrial, retail, etc.

This poses new challenges for insurance cover that companies need to have today. That is why the industry’s leading experts recommend reconsidering the cost structure so that in the future there are no problems with any of the policies due to possible underinsuring, and so that there are no shortcomings in damages.

finance, purchasing managers, insurers, adjusters and insurance brokers, They must know what andClaims are likely to take longer and cost more to resolve than in 2021. Updates to their insurance programs should consider the importance of these factors, especially when determining appropriate deductible levels, policy values, insurance amounts and maximum reimbursement periods, as replacement times may be extended today. three times more than it was before the pandemic, and this directly affects the analysis of lost profits.

“Companies need to evaluate how to deal with these issues and the insurance coverage they currently have so that the impact of inflation and insufficient insurance on compensation, and the impact of supply chain delays, is as low as possible to your advantage. Accordingly, Lockton is advising and technically helping them deal with these new challenges of higher costs, rising insurance prices, and inflation in general,” Ward concluded.