After years of absence from the major world economies, inflation risk has re-emerged in a global context characterised by a dynamic mix of old and new factors. While evidence of inflation reduction is becoming clearer, thanks to the stability efforts of central banks, the CRO Forum emphasises the importance of not underestimating inflation risk and its capacity to influence other risks within the taxonomy. This paper analyses the primary drivers contributing to the current inflation risk, outlining expected and potential impacts on the insurance industry. It offers key insights into tools for measuring and forecasting inflation risk, as well as necessary perspectives on best practices for monitoring and managing it.
