Inflation risk is of high relevance in non-life insurers' long-tail business and can have a major
impact on claims reserving. In this paper, we empirically study claims inflation with focus on
automobile liability insurance based on a data set provided by a large German non-life
insurance company. The aim is to obtain empirical insight regarding the drivers of claims
inflation risk and its impact on reserving. Toward this end, we use stepwise multiple
regression analysis to identify relevant drivers based on economic indices related to health …