Inflation factor

{
  "id": "MLC-T-INS-003670",
  "term": "Inflation factor",
  "field": "Insurance and risk management",
  "definition": "A multiplier applied to historical costs or values to adjust them for the effects of rising prices over time. This factor accounts for the decrease in purchasing power of money, allowing for a more accurate assessment of current or future financial needs. Insurers use inflation factors to project future claim costs, particularly for long-term liabilities such as workers' compensation or liability claims, and to adjust policy limits to maintain adequate coverage.",
  "url": "https://mlchart.com/terminology/insurance/inflation-factor/"
}