The soaring price of lumber was one of the hottest topics on the lips of industry executives speaking at midyear conferences, becoming a focus of discussion almost as often as cyber risks and social inflation.Executive SummaryWhile a trio of industry CEOs unanimously agreed that social inflation will have a profound near-term impact on their businesses at a recent industry event, discussions about lumber prices and potential power outages caught our attention.
During the 37th Annual Insurance Conference hosted by S&P Global Ratings last week, John Neal, chief executive officer of Lloyd’s of London, led off a discussion on social inflation and then pointed to general economic inflation as one of the second-order impacts of COVID.
“The price of timber is up 40 percent. The price of fittings is up 20 percent. There is a supply chain impact” of COVID and work-from-home behaviors. “Provided we’re alert when we price [insurance], we’re OK,” he said.