Losses from the that swept through the southern United States earlier this year continue to loom large among the concerns of property and casualty insurers, even as the nation contends with wildfires and anticipates yet another above-average .“On its own, Uri would not necessarily impact premium rates,” says , CBE, Triple-I vice president and senior economist.“What matters is the overall severity of extreme weather events during a calendar year or a specific peril season.” Dr.

Léonard reports that current expectations among weather experts of higher-than-average hurricane and wildfire seasons – in addition to Uri – will likely contribute to increases in property insurance rates in 2021, “before and regardless of inflation.” “Traditionally, actuarial models keep natural catastrophe losses and inflation separate and only combine them in the last stage of rate estimates,” Léonard says.  Three 2021 trends, he says, add up to put upward significant pressure on insurance rates for 2022: “There are a few situations in which extreme weather events directly contribute to replacement cost increases, which, in turn, impact rates,” Léonard says. “But ‘price gouging’ – such as happened after Uri – shouldn’t be confused with inflation.It’s temporary, while inflation almost always endures.”