• Terrorism risk insuranceManaging terrorism risk more complicated today

    Managing terrorism risk today requires a combination of strategies and tactics that protect people, property, and finances. On the financial side, the choice is whether to retain or transfer the risk via insurance. But the changing pattern of terrorism risk has some companies questioning whether they are adequately insured for business interruption and related losses. And they wonder how to prepare for potential losses from cyber terrorism and other events. 

  • DisastersWorst flooding since 1998 leaves $33 billion economic toll in China

    The new Global Catastrophe Recap report, covering July 2016 disasters, reveals that much of China endured substantial seasonal “Mei-Yu” rainfall that led to a dramatic worsening of flooding along the Yangtze River Basin and in the country’s northeast. Total combined economic losses were estimated at $33 billion. Meanwhile, the United States recorded six separate outbreaks of severe convective storms and flash flooding from the Rockies to the East Coast. Total combined economic losses were minimally estimated at $1.5 billion. Only 2 percent of China damage is covered by insurance, compared to nearly 70 percent for U.S. storms.

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  • InsuranceISO to collect data about terrorism insurance for Treasury Department

    ISO will collect, aggregate, and help analyze terrorism data this year for the U.S. Department of the Treasury, the federal agency charged with assessing the effectiveness of the federal Terrorism Risk Insurance Program. ISO is a Verisk Analytics.

  • Emerging threatsMaking sure insurance for an uncertain climate is effective

    In December, negotiators at the Paris climate meeting adopted insurance as an instrument to aid climate adaptation. Earlier in the year, the leaders of the G7 pledged to bring climate insurance to 400 million uninsured individuals in poor countries by 2020. Experts welcome these developments, but also highlight the difficulties that policymakers will face in turning the ideas into action. They warn that ill-designed and poorly implemented insurance instruments could fail to reach the goals of negotiators, or worse, prove detrimental to the very people they are intended to protect.

  • DisastersAs storms continue to batter U.K., estimates of cost rise

    As Storm Frank – which is following on the heels of Storms Eva and Desmond — continues to batter England, Scotland, and Wales, estimates of the cost of the damage wrought continue to rise. The total economic loss caused by the three Storms may well breach £3 billion – and these projections do not include any government spending on flood defenses, estimated to be between £2.3 billion and £2.8 billion.

  • Emerging threatsU.K.: Economic costs from flooding could reach £1.5bn, reduce GDP growth

    Economic losses caused by the flooding which has devastated parts of Britain in the past few days could exceed 1.5 billion pounds, and shave 0.2-0.3 percent off GDP growth overall in the first quarter of 2016. Insurers will likely shoulder the bulk of the burden after first Storm Desmond and then Storm Eva saw waters swamp large swathes of the country.

  • Flood insuranceBetter FEMA options for increasing the affordability of flood insurance

    FEMA currently does not have the policy analysis capacity or necessary data to comprehensively analyze different options for making flood insurance more affordable. A new report identifies an approach for the Federal Emergency Management Agency (FEMA) to evaluate policy options for making premiums through the National Flood Insurance Program (NFIP) more affordable for those who have limited ability to pay.

  • Coastal resilienceU.S. coastal flood risk on the rise ten years after Hurricane Katrina

    A decade after Hurricane Katrina caused $41 billion in property and casualty insurance losses, the most expensive catastrophe ever experienced by the global insurance industry, rising sea levels are driving up expected economic and insurance losses from hurricane-driven storm surge in coastal cities across the United States. Rising sea levels contributing to increased risk of severe economic damage from flood following a hurricane – and Miami, New York, and Tampa now face greater risk than New Orleans.

  • Flood insuranceCommunity-based flood insurance offers benefits, faces challenges

    Community-based flood insurance — a single insurance policy that in theory would cover an entire community — may create new opportunities to reduce flood losses and enhance the likelihood of communities paying more attention to flood risk mitigation, says a new National Academies report. This option for providing flood insurance, however, would not provide the sole solution for all of the nation’s flood insurance challenges.

  • Terrorism insurance2014 uncertainty over renewal of Terrorism Risk Insurance Act changed consumer behavior

    Terrorism insurance take-up rates dropped off toward the end of 2014, due to the anxiety stemming from the unexpected expiration of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA). Through much of 2014, there was uncertainty whether Congress would renew the program, which initially passed in the wake of the 9/11 terrorist attacks. This uncertainty led customers, and potential customers, to change their insurance buying plans.

  • Flood insuranceTying insurance rates to flood risk for low-lying structures

    Current methods used by the National Flood Insurance Program for setting risk-based insurance rates do not fully capture the flood risk for low-lying structures, which are more likely to incur losses because they are subject to longer duration and greater depth of flooding and are flooded more frequently and by smaller flood events, says a new report from the National Research Council. The report offers alternative approaches for calculating risk-based premiums for these structures, ranging from incremental changes to current methods to a complete overhaul of the system, although it does not recommend which approach the NFIP should adopt or what the new rates should be.

  • CyberinsuranceUnderwriters of cyberinsurance policies need better understanding of cyber risks

    Demand for insurance that covers an ever-increasing range of cyberattacks is growing and evolving rapidly, and a number of insurance companies are seeking advice through sponsored events that can gradually educate their work forces. At Standard & Poor’s Rating Services 2015 Insurance Conference last week, a panel of insurance experts stressed the importance of insurance underwriters gaining a better understanding of cyber risks in order to make better property and risk assessments.

  • Emerging threatsOverstretched global food system vulnerable to disruptive shocks: Lloyd's report

    The vulnerability of the overstretched global food system to sudden shocks, and the wide repercussions for communities, businesses, and governments was highlighted yesterday by a report published by Lloyd’s. The reports highlights the far-reaching economic and humanitarian consequences that disruptions such as weather catastrophes or plant pandemics – many of which are exacerbated by climate change — could have on the global economy. This series of shocks has the potential to trigger food riots in urban areas across the Middle East, North Africa, and Latin America, leading to wider political instability and knock-on effects for a wide range of businesses.

  • Flood insuranceNational Flood Insurance Program to focus more on victims’ needs

    Roy Wright, the newly appointed director of the National Flood Insurance Program (NFIP), said that he will push it to better focus on the welfare and individual needs of disaster victims, following years of scandal within the organization. Wright, who will preside over the federal program beginning this week, criticized the insurance loopholes and complicated rules of private insurance companies that were perpetuated by the NFIP to “nickel-and-dime” policyholders and undermine their abilities to rebuild following a flood.

  • Flood insuranceFEMA considering overhauling the National Flood Insurance Program

    Federal legislators and officials with the Federal Emergency Management Agency (FEMA) are trying to overhaul the National Flood Insurance Program which relies on eighty-three companies to sell policies, collection premiums, and calculate damages after disasters. The program covers roughly 5.2 million homes and businesses nationwide. The move comes just as FEMA is in talks to settle almost 1,800 lawsuits filed by homeowners claiming they were underpaid on flood insurance claims after Superstorm Sandy. The flood insurance program was launched in 1968 after private insurers increased their coverage prices due to newer risk assessments, leaving most homeowners unable to afford them.