Transfer Pricing: economic impacts on the insurance industry

In 2022-2023, the insurance industry witnessed the collision of prominent themes, which will shape the industry for the next decade. Firstly, inflationary pressures are feeding higher claims and overhead costs, challenging insurers to pass costs onto customers through higher premiums in an often saturated competitive markets.

Secondly, rapidly rising interest rates can have notable impacts on insurance group’s investment returns and the potential for large unrealised losses for those with long-dated fixed income investments, as well as causing heightened cost of capital requirements.

Finally, the unrelenting pace of advances in technology and data is disrupting and moulding insurance group’s models to ensure they are sustainable and adaptive to changes in demographics, climate, and geopolitical risks.

Read more with Deloitte specialists Philip Moralee and Craig Bennie exploring the transfer pricing implications on these prominent trends for the insurance sector over here.