Pricing in an Age of High Inflation

In this article, we look at how insurers can deal with the challenges posed by high inflation. Insurers in this high-inflation environment are exposed to cost increases and must set prices today for costs that may occur in the future. In a period of high inflation, the future looks less like the past, and the risks of pricing errors are raised. Different costs that an insurance company is exposed to experience inflation at different rates, and customer and market behavior is also likely to change more rapidly during periods of high inflation. The article outlines several strategies that insurers can use to deal with high inflation, including improving estimates of future inflation, utilizing scenario analysis, adjusting the product offering, utilizing a credibility approach, and improving time to market. In 2022 the majority of G7 countries experienced rates of consumer price inflation that hit multi-decade highs. In early 2023, inflation remained high compared to 50-year trends in societies worldwide. Insurance companies are not only exposed to these cost increases but also must set prices today for costs that may occur months, years, and in some cases, decades into the future. In such an environment, the pitfalls an insurance company faces if they fail to take the right pricing action at the right time can be severe.
Akur8 and FCG white paper - Pricing in an Age of High Inflation
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TERMS OF USE OF THE PAPER “ANALYSIS OF AKUR8 PRICING SOLUTION AND METHODOLOGY” (“Terms of Use”)

In the context of Akur8’s and Milliman’s strategic alliance to provide AI-driven pricing solutions to insurers, Akur8 has engaged Milliman to analyse Akur8’s pricing solution and methodology (“Akur8 Tool”). Milliman’s Paper “Analysis of Akur8 pricing solution and methodology” (the “Paper”) provides a general opinion on the relevance of the modelling choices made by the Akur8 Tool in the context of non-life insurance pricing.Milliman is hereafter referred to as “we” and the readers of the Paper as “you”.

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Any judgement on the elements contained in the Paper should be made only after studying the document in its entirety. Any conclusions drawn from one or more sections taken in isolation may be incorrect.The Paper is intended to be used by persons with certain levels of expertise in the areas covered and for the purposes stated. Any reader of the Paper should have a certain level of expertise in the areas related to this analysis, in order to appreciate the significance of the assumptions made and the impact of those assumptions on the results obtained.We recommend that any reader be assisted in reviewing the Paper by a qualified professional to ensure that our findings and recommendations have been understood.The Paper has been commissioned by and prepared for the exclusive use of Akur8, in accordance with the terms of our engagement letter. We make no commitment to third parties and shall not be liable for any use by a third party of an opinion or more generally for the use by such third party of the results included in the Paper. Milliman does not intend to benefit or create any legal obligation to any third-party recipient of its work. 
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Any right not expressly granted to you in these Terms of Use remains the right of Milliman and Akur8. Using the Paper under the conditions set forth in the section “Restrictions” does not give you ownership of any intellectual property rights in the content you access (including any branding used in the Paper)
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TERMS OF USE OF THE PAPER “ANALYSIS OF AKUR8 PRICING SOLUTION AND METHODOLOGY” (“Terms of Use”)

In the context of Akur8’s and Milliman’s strategic alliance to provide AI-driven pricing solutions to insurers, Akur8 has engaged Milliman to analyse Akur8’s pricing solution and methodology (“Akur8 Tool”). Milliman’s Paper “Analysis of Akur8 pricing solution and methodology” (the “Paper”) provides a general opinion on the relevance of the modelling choices made by the Akur8 Tool in the context of non-life insurance pricing.Milliman is hereafter referred to as “we” and the readers of the Paper as “you”.

RESTRICTIONS
Distribution
You are not allowed to distribute or disclose all or part of the Paper to any third party whatsoever, without Milliman’s prior written consent, which may be given at their sole discretion.No Use of Milliman nameYou agree not to use and/or refer to Milliman’s name and/or trademarks directly or indirectly in any communication with any third party without Milliman’s prior written consent, which consent shall be required for each use or disclosure and shall be granted only at Milliman’s sole discretion.

RESERVATION
Absence of Commitment
Any judgement on the elements contained in the Paper should be made only after studying the document in its entirety. Any conclusions drawn from one or more sections taken in isolation may be incorrect.The Paper is intended to be used by persons with certain levels of expertise in the areas covered and for the purposes stated. Any reader of the Paper should have a certain level of expertise in the areas related to this analysis, in order to appreciate the significance of the assumptions made and the impact of those assumptions on the results obtained.We recommend that any reader be assisted in reviewing the Paper by a qualified professional to ensure that our findings and recommendations have been understood.The Paper has been commissioned by and prepared for the exclusive use of Akur8, in accordance with the terms of our engagement letter. We make no commitment to third parties and shall not be liable for any use by a third party of an opinion or more generally for the use by such third party of the results included in the Paper. Milliman does not intend to benefit or create any legal obligation to any third-party recipient of its work. 
Intellectual Property
Any right not expressly granted to you in these Terms of Use remains the right of Milliman and Akur8. Using the Paper under the conditions set forth in the section “Restrictions” does not give you ownership of any intellectual property rights in the content you access (including any branding used in the Paper)
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