Consumer Price Index

Updated: 29 February 2024

What Does Consumer Price Index Mean?

The consumer price index (CPI) is a tool that is used to calculate inflation in a given area. Insurable assets, such as healthcare, housing, and transportation are factored into CPI calculations

Insuranceopedia Explains Consumer Price Index

Insurance companies refer to the consumer price index to track price changes in the assets that they are insuring. For example, if a health insurance companies looks at the consumer price index and notices that medical costs have risen 5 percent in the past year, they may have to raise their prices in order to keep up with this inflation. If they don’t, they may struggle to cover all of the claims.

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