“Some of these price increases might be only transitory. Historically, cost surges can still sometimes hit businesses such as homeowners insurance. Ryan Tunis of Autonomous Research noted that a 2009 jump in ratios of losses and expenses to premiums for home policies was largely attributable to a jump in construction costs. For some types of policies, such as home and auto, sustained inflation can be priced into renewal terms. There are, however, also businesses for which premiums collected today have to cover years of possible future claims. If persistent wage inflation occurs, for example, it could hit commercial policies such as workers’ compensation, according to Mr. Tunis.”
