Overview of economic distortions

War, inflation, interest rate hikes and supply chain bottlenecks – the current economic outlook is uncertain. What impact are the current economic and global circumstances having on insurance?

We’ve put together an overview in which we list and assess the current challenges.

Economic challenges

Impact on insurance industry

Impact on business

Supply chain bottlenecks

  • Companies are generating fewer sales, resulting in a lower premium volume
  • Length of interruption for business interruption claims is increasing, resulting in higher claims payments
  • Loss mitigation is becoming more difficult – especially in the area of business interruption, which is also leading to higher costs
  • Pressure on premiums is increasing
  • Sums insured and indemnity periods, particularly in the area of business interruption, need to be reviewed
  • Loss mitigation is becoming more difficult because there are fewer alternatives in terms of provisional arrangements or third parties
  • Inventories must be increased, and sums insured are increasing


  • Higher claims payments
  • Uncertain pricing for risks with a long-term impact such as liability and personal insurance
  • Higher wages, higher premium volume
  • Adjustment of sums insured (reassessment of inventories)
  • Wage and therefore margin pressure
  • Greater uncertainty in pricing for capital goods with long delivery times

Interest rate hikes

  • Less investment, which means less project insurance
  • Increased income from investments
  • Ditto insurance industry

Skills shortages

  • Staff shortages, resulting in risk of longer waiting times and declining quality
  • Prioritisation of enquiries due to limited capacity in underwriting, resulting in less choice for insurance solutions offering good value for money
  • Staff shortages, resulting in risk of longer waiting times and declining quality
  • Increased planning effort
  • Projects cannot be implemented
  • Employee market, resulting in pressure for wage increases, improved benefits


  • Need for insurance solutions is increasing while availability is decreasing
  • Clarification still needed regarding the handling of ransom payment claims
  • Will this risk be insurable in the future?
  • Need for greater employee awareness
  • Need for risk assessments
  • Investment in IT security
  • Conclusion of cyber policies

Environment-Sustainability-Governance (ESG)

  • ESG is also becoming increasingly important in the submission process
  • Number of risk carriers could reduce with lack of knowledge in relation to ESG
  • Investment policy of multi-employer plans is being examined more closely with regard to this criterion
  • ESG is also becoming increasingly relevant in the area of D&O
  • ESG belongs in the corporate strategy
  • Need for greater awareness
  • Number of possible insurance partners is (still) falling, further strengthening the sellers’ market

Geopolitical power relations

  • There is general uncertainty, inhibiting investment
  • Sanction clauses (country lists) will increase
  • Consequences of war: Rising energy and raw material prices, disrupted supply chains, poverty in certain countries
  • Ditto insurance industry

Pandemic awareness and globalisation

  • Lack of clarity regarding handling of future pandemics by the insurance industry
  • Residual risk remains, state as protective shield?
  • Only limited insurable risk – thus business risk

Energy shortage

  • Risk if electricity, gas or oil consumption is restricted:
    Private use => Risk for those working from home
    Industry/services => IT systems operating at reduced capacity
  • Risk of idle factories, depending on where the state prioritises
  • Energy-intensive production facilities (e.g. glass production or large bakeries) may have to reduce capacities
  • Investment in redundant, alternative energy supplies could increase

The insurance industry is also feeling the effects of the current economic challenges in the form of higher internal costs and higher claims costs. For businesses, this means higher premiums, less attractive insurance solutions and fewer insurance options. At the same time, the insurance industry and businesses also need to define new approaches to the handling of resources and thus meet increased requirements with respect to sustainability.

We can analyse your risks and offer you the right insurance and best possible cover. Contact us.



Marco Buholzer, CEO, and specialist teams