• PerspectiveTime for Regulators to Take Cyber Insurance Seriously

    In April 1997, Steven Haase and some of his colleagues in the insurance industry hosted a “Breach on the Beach” party at the International Risk Insurance Management Society’s annual convention in Honolulu to launch the first ever cyber-insurance policy. Josephine Wolff writes that it would be years, still, before cyber insurance would generate sufficiently significant sales numbers to attract the interest of most major insurers and their customers. More than two decades later, cyber insurance has expanded into a multibillion-dollar global business, with 528 U.S. insurance firms reporting that they offered cyber-specific policies in 2018.

  • Climate & businessExtreme Weather Events Could Bring Next Recession

    Physical climate risk from extreme weather events remains unaccounted for in financial markets. Without better knowledge of the risk, the average energy investor can only hope that the next extreme event won’t trigger a sudden correction, according to new research. Experts say that the market needs to plan for weather risk, or face extreme correction.

  • Climate costs2019: Economic Losses from Natural Disasters Top $232 billion in 2019

    A new report from Aon shows that 409 natural catastrophe events of 2019 resulted in economic losses of $232 billion. Of that total, private sector and government-sponsored insurance programs covered $71 billion. The costliest individual peril was inland flooding, which caused economic losses globally of $82 billion, followed by tropical cyclone, at $68 billion.

  • FloodsComparing Floodplain Protection Today to Predicted Future Flood Losses

    A new study seeks to answer an important question related to flooding in the United States – pay now to protect undeveloped areas that are likely to flood in the future or allow developments to go ahead and pay for damage when it occurs.

  • Climate & businessThe Challenges Facing Fisheries Climate Risk Insurance

    The world’s first “Fisheries Index Insurance” scheme, launched by an international consortium in July, is a sovereign-level instrument designed to protect Caribbean fishing communities from extreme weather events which may become more frequent and intense due to climate change. But insurance schemes with the potential to improve the resilience of global fisheries face a host of future challenges, researchers say.

  • PerspectiveChanging Weather Could Put Insurance Firms Out of Business

    The fiercer storms which a changing climate produces could soon come to British shores, paralyzing trade for days. This is an example of the costs that fossil-fuel emissions may bring, The Economist writes. Insurance companies are uniquely exposed to these sorts of changes. Already, insurers are seeing disasters of unprecedented scale. Very costly disasters are becoming more frequent, while catastrophes are getting harder to predict. “Above all,” says The Economist, “insurers need to take the lead in publicizing the growing risks posed by climate change, and the need for cover.”

  • Climate threatsEnvironmental “secondary perils” an increasing threat: Swiss Re

    The catastrophe loss experience of the last two years is a wake-up call for the insurance industry, highlighting a trend of growing devastation wreaked by so-called ‘secondary perils’ – which are independent small to mid-sized events, or secondary effects of a primary disaster.

  • FloodsClimate-smart national flood insurance program

    By Dena Adler

    Last month the Midwest faced historic floods that devastated rural communities, drowned farms, contaminated water supplies, and resulted in billions of dollars in damages. As climate change exacerbates the risk of these catastrophic flooding events, Congress can help citizens take these actions to adapt to the risks of climate change by adopting a package of climate-smart reforms for the National Flood Insurance Program (NFIP).

  • Natural disasters2018 fourth costliest year in insured losses

    2018 was the fourth-costliest year since 1980 in terms of insured losses. This was due to an accumulation of severe and costly events in the second half of the year. A comparison with the last 30 years shows that 2018 was above the inflation-adjusted overall loss average of $140bn. The figure for insured losses – $80bn – was significantly higher than the 30-year average of $41bn. 2018 therefore ranks among the ten costliest disaster years in terms of overall losses, and was the fourth-costliest year since 1980 for the insurance industry.

  • Climate threatsInsurance industry dangerously unprepared for extreme weather

    As historic flooding caused by climate change devastates coastal communities, new research reveals that the insurance industry hasn’t considered a changing climate in their practices, putting homeowners at financial risk.

  • Terrorism insuranceInsurer hails U.K. government action to close the terrorism insurance gap

    Pool Re the other day welcomed the U.K. government’s commitment to amend the 1993 Reinsurance (Acts of Terrorism) Act to enable the reinsurer to extend its cover to include non-damage business interruption losses resulting from acts of terrorism. The reinsurer is currently restricted by the 1993 Act only to pay out if physical damage has occurred to commercial property. This means that businesses, inside a police cordon, that suffer financial loss through being unable to access their property or to trade, are only covered if there has been physical damage during a terrorist attack.

  • Climate-change costs2017 climate, weather disasters in U.S. totaling $306 billion — a new record

    2017 will be remembered as a year of extremes for the United States as floods, tornadoes, hurricanes, drought, fires, and freezes claimed hundreds of lives and visited economic hardship upon the nation. The average U.S. temperature in 2017 was 54.6 degrees F (2.6 degrees F above average), making 2017 third warmest year in 123 years of record-keeping. The five warmest years on record for the United States all have occurred since 2006. In 2017, the United States experienced 16 weather and climate disasters each with losses exceeding $1 billion, totaling approximately $306 billion — a new U.S. record. Far more tragic was the human toll. At least 362 people died and many more were injured during the course of these disasters.

  • Natural disasterHurricanes make 2017 year of highest insured losses ever

    The hurricane trio of Harvey, Irma, and Maria will cost the insurance industry a record amount in 2017: the final insurance bill for those and other natural catastrophes, including a severe earthquake in Mexico, is expected to come to $135 billion – higher than ever before. And overall losses – that is, including uninsured losses – amounted to $330 billion, the second-highest figure ever recorded for natural disasters. The only costlier year so far was 2011, when the Tohoku earthquake in Japan contributed to overall losses of $354 billion in today’s dollars.

  • Climate-change costBillion-dollar weather and climate disasters on the rise

    from 1980 to 2017, the United States has sustained 218 weather and climate disasters in which overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2017). The total cost of these 218 events exceeds $1.2 trillion. This total does not yet include the costs for Hurricanes Harvey, Irma and Maria. Between 1 January and 6 October 2017, there have been fifteen weather and climate disaster events with losses exceeding $1 billion each across the United States. The 1980–2016 annual average pf weather events with losses exceeding $1 billion each is 5.5 events (CPI-adjusted); the annual average for the most recent 5 years (2012–2016) is 10.6 events (CPI-adjusted).

  • Flood insuranceAfter hurricanes, Congress ponders future of flood insurance program

    By Abby Livingston

    The devastating hit Houston took from Hurricane Harvey has exacerbated — and highlighted — the enormous financial jam facing the National Flood Insurance Program. Thanks to the recent onslaught of hurricanes hitting Texas, Florida and Puerto Rico, there has never been a greater need for the program. But that need has also set off a new round of calls to dramatically overhaul a program that hasn’t been able to sustain itself without major subsidies from the U.S. Treasury.