Clause that adjusts the retention and limit provisions of an excess of loss reinsurance in accordance with the fluctuations of a published wage or price index. The clause apportions the effect of inflation proportionately between the parties. protects the reinsurer who, on the basis of unadjusted retention, would suffer the full effects of inflation. The severe inflation clause is a variant that invokes the index only if inflation exceeds an agreed level, e.g. 20 per cent.