New CAS E-Forum Essay Offers Novel Approach to Measuring Social Inflation

“Understanding and Coping with the ‘New Normal’ in Insurance Inflation" explores the challenges actuaries are facing as they account for the “new normal” of recent structural social and economic changes that are dramatically altering cost trends in some property-casualty insurance lines.

After identifying the pitfalls of using the Bureau of Labor Statistics’ Consumer Price Index (CPI) or specific components to measure inflation and social inflation, author Louise Francis, FCAS, CSPA, MAAA, offers an alternative adjustment that will often exceed the CPI. She also discusses business strategies to detect and react to changes in insurance trends. The essay is part of the Summer 2024 E-Forum, which also includes essays on artificial intelligence and more.