• 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.

  • Hurricane IrmaHurricane loss model estimates damage caused by Hurricane Irma at $19 billion

    A team of researchers estimates that Hurricane Irma caused $19.4 billion in wind-related losses to Florida residents alone. The data does not cover flood losses. Of that total, $6.3 billion will be paid by insurance companies. As a result, roughly two-thirds of the losses will be borne by homeowners.

  • Disaster costEconomic costs of Harvey, Irma $200-$300 billion; insured cost to reach $70 billion

    The insured cost of Hurricanes Harvey and Irma is likely to reach $70 billion, while the economic cost — which includes uninsured losses – is in the range of $200 billion to $300 billion, leading insurers say. Lloyd’s of London said the claims would make 2017 one of the worst years for natural disasters with the hurricane season not yet over.

  • Hurricane HarveyHarvey's cost could reach $100 billion: Insurance experts

    The floods caused by Hurricane Harvey are only going to worsen in the coming days, but insurance experts say that estimates based on the damage Harvey has already caused suggest that the financial cost of the devastating hurricane could be as high as $100 billion. The 2005 Hurricane Katrina-caused damaged reached $120 billion, of which $80 billion were insured losses. The 2012 Megastorm Sandy caused $75 billion in economic losses.

  • PreparednessRisk reduction: What drives preparedness?

    More targeted efforts are needed from both the public and private insurance sectors in order to encourage people to take action to reduce their risk of flood damage, according to a new study of three European countries. “Currently neither insurance nor governments successfully encourage risk reduction. Increased and more targeted efforts particularly from local authorities will be important, and have the capacity to change the picture. This will be exceedingly important considering extreme events from climate change,” says one expert.

  • CyberattacksCyberattack could cost $120 billion: Lloyd’s

    Insurance giant Lloyd’s of London has warned that the cost of a serious cyberattack to the global economy could reach $120 billion or more – which was the cost of damage inflicted by Hurricanes Katrina or Sandy. insurance firm says the threat posed by global cyberattacks has spiraled, and that it poses a huge risk over the next decade to business and governments everywhere. Trevor Maynard, Lloyd’s head of innovation and co-author of the report, said that where people are involved, risk changes quite rapidly — from cyberattacks to terrorism and political risk – but that from year to year, such risks vary relatively little. “But climate change in the end will be far larger as a risk,” he said, and it remains the biggest challenge in the long run.

  • Emerging threatsClimate change likely to increase risk of costly storms in U.K.

    The impact of climate change on the United Kingdom is likely to mean a higher number of more expensive wind storms, the insurance industry warned. New analysis done for the Association of British Insurers (ABI) shows temperature increases of just a small number of degrees are likely to lead to insurance losses for high winds which could be 11 percent, 23 percent, or even 25 percent higher nationwide.

  • Global risksPopulism, terrorism converge to compound global risks

    Aon publishes 2017 Risk Maps for Political Risk, Terrorism and Political Violence shows there has been a 14 percent increase in the number of terrorist attacks worldwide in 2016, up to 4,151 from 3,633 in 2015. Western countries saw a 174 percent increase in terrorist attacks in 2016, up from 35 attacks in 2015 to 96 attacks in 2016. Oil and gas companies were the target of 41 percent of terrorist attacks on commercial interests in 2016 and the trend has continued in 2017. But 2017 marks the first year in the last four where as many countries experienced a decline in political risk for investors as those experiencing an increase. This suggests a modest improvement in economic resilience after many years of deterioration. The potential for divergence between the United States and Europe around sanctions regimes could create uncertainty for investors in Iran, Russia, and even Cuba.

  • Disaster-related lossHarsh U.S. weather in March expected to cost insurers more than $2 billion

    An extremely active period for severe weather persisted in the United States throughout March, as four separate significant outbreaks led to extensive damage in central and eastern parts of the country. The most prolific outbreak from 6 to 10 March resulted in major damage from tornadoes, large hail, and straight-line winds in the Plains, Midwest, and Southeast. Total economic losses for this event alone were estimated at $1.7 billion, while public and private insurance claims were listed at $1.2 billion. The aggregated cost to the insurance industry from the four events was expected to exceed $2.0 billion.

  • Flood insuranceRising flood insurance costs a growing burden to communities, NYC homeowners

    Flood insurance is already difficult to afford for many homeowners in New York City, and the situation will only worsen as flood maps are revised to reflect current risk and if the federal government continues to move toward risk-based rates, according to a new study.of-its-kind study by the RAND Corporation.

  • Cyberterrorism insuranceCyberterrorism threat must be addressed: Pool Re’s chief

    Cyber is unlike any other peril, because of its theoretical ability to affect almost any insurance class. This significantly impairs (re)insurers’ ability to allocate capital, to model losses with confidence, and, as a result, to price insurance products accurately. The gap between the available global insurance capacity and market exposure has become increasingly stark: market capacity stands at approximately $500 million, but the exposure is estimated to be more than $130 billion. Pool Re, the U.K.’s $7.3 billion terrorism reinsurance fund, wants to extend its cover to include cyberattacks on property, chief executive Julian Enoizi said.

  • Natural disastersNatural catastrophe losses at their highest for four years

    A number of devastating earthquakes and powerful storms made 2016 the costliest twelve months for natural catastrophe losses in the last four years. Losses totaled US$ 175 billion, a good two-thirds more than in the previous year, and very nearly as high as the figure for 2012 ($ 180 billion). The share of uninsured losses – the so-called protection or insurance gap – remained substantial at around 70 percent. Almost 30 percent of the losses, some $ 50 billion, were insured.

  • Extreme weatherWhen catastrophe strikes, who foots the bill?

    By Carolin Schellhorn

    One consequence of climate change is that extreme weather events are occurring more often with the potential to cause catastrophic damage more frequently. According to the 2016 Global Risks Report of the World Economic Forum, extreme weather events rank second as the most likely threat to global stability going forward. And my research on the safety and soundness of financial institutions suggests this trend may also threaten the stability of the insurance industry. Extreme weather is expensive for insurance companies and their reinsurers, communities, taxpayers, and also, potentially, capital market investors. And it’s only getting more expensive as climate change increases the frequency of storms and their severity. While more can be done to improve risk pricing and risk management, climate change mitigation is critical for our ability to continue to survive and recover from the catastrophes that lie ahead.

  • Extreme weatherWhen catastrophe strikes, who foots the bill?

    By Carolin Schellhorn

    One consequence of climate change is that extreme weather events are occurring more often with the potential to cause catastrophic damage more frequently. According to the 2016 Global Risks Report of the World Economic Forum, extreme weather events rank second as the most likely threat to global stability going forward. And my research on the safety and soundness of financial institutions suggests this trend may also threaten the stability of the insurance industry. Extreme weather is expensive for insurance companies and their reinsurers, communities, taxpayers, and also, potentially, capital market investors. And it’s only getting more expensive as climate change increases the frequency of storms and their severity. While more can be done to improve risk pricing and risk management, climate change mitigation is critical for our ability to continue to survive and recover from the catastrophes that lie ahead.

  • Terrorism riskWhy Terrorism (Re)insurance Pools need to collaborate

    Julian Enoizi, CEO of Pool Re, the U.K. government-backed terrorism pool, on Tuesday, 13 September, posted a note on the Pool Re’s Web site ahead of the 6 October Global Terrorism Risk Insurance Conference, which will take place in Canberra, Australia. “The terrorist threat is unprecedented and persistent, and our national interests are now threatened at home and overseas,” he wrote. “Terrorism is a global phenomenon and we need to face up to it with an internationally joined-up response involving innovation, creativity, and collaboration.”