Unprecedented inflation has led to increased costs across every facet of our lives. The auto industry is no different.
The cost of labor and parts has been growing for several years and, more recently, spiking. The Bureau of Labor Statistics indicates auto repair consumer price index (CPI) is up 20% year-over-year with parts CPI being up 5% year-over-year as of this summer. This means repairs today are much more expensive than they were just a few years ago.
Within the portfolio, we’re seeing an increase in loss ratios driven by these higher claim costs. To combat the inflationary impact and keep loss ratios stable, we’re recommending reserve increases. Your Portfolio representative will be in touch with more detailed information.
If you have any questions or would like any additional detail, don’t hesitate to contact Risk Management. We appreciate your continued support in building wealth!
