Wednesday, October 3, 2018

Inflation, Devaluation and Underinsurance: Impact and Possible Solutions

Anyone doing business in, living in, or familiar with Latin America would be aware of how often these phenomena affect the region, with Argentina and Venezuela leading the charge. While currency devaluation and ever-increasing inflation have plagued the region for decades, most economies in the region have stabilized and begun to grow at a constant rate. However, this has not been the case for these two nations. As currencies lose value and prices climb at an alarming rate, underwriting risks becomes more difficult. In this post, we look at some ways in which these phenomena affect the underwriting of (re)insurance, and some suggestions to address the problem.