• FEMA Projects Up to $3.5 - $5.3 Billion in Hurricane Ian Flood Insurance Claims Payments

    As of Nov. 10, the National Flood Insurance Program (NFIP) has received more than 44,000 flood claims from Hurricane Ian and has paid nearly $437 million to policyholders. FEMA’s initial estimate projects Hurricane Ian could potentially result in NFIP claims losses between $3.5 - $5.3 billion, including loss adjustment expenses.

  • The U.S. Needs to Prepare for More Billion-Dollar Climate Disasters Like Hurricane Ian

    Billion-dollar disasters such as Hurricane Ian are on the rise in the United States. Officials should take swift action to reduce the damage and protect Americans.

  • Weather Disasters in U.S. Dominate Natural Disaster Losses in 2021

    In 2021, natural disasters caused overall losses of $280bn, of which roughly $120bn were insured. Alongside 2005 and 2011, the year 2021 proved to be the second-costliest ever for the insurance sector (record year 2017: $146bn, inflation-adjusted). Overall losses from natural disasters were the fourth-highest to date (record year 2011: $355bn). Hurricane Ida was the year’s costliest natural disaster, with overall losses of $65bn (insured losses of $36bn). In Europe, flash floods after extreme rainfall caused losses of $54bn (€46bn) – the costliest natural disaster on record in Germany. Many of the weather catastrophes fit in with the expected consequences of climate change, making greater loss preparedness and  climate protection a matter of urgency.

  • Improving Use of Flood Insurance

    DHS S&T and partners will study improvements to flood insurance, identifying ways to expand the use of flood insurance to reduce the financial losses suffered by homeowners and creditors in future storms.

  • Global Warming Increased U.S. Crop Insurance Losses by $27 Billion in 27 Years

    Higher temperatures attributed to climate change caused payouts from the nation’s biggest farm support program to increase by $27 billion between 1991 and 2017, according to new estimates from Stanford researchers. Costs are likely to rise even further with the growing intensity and frequency of heat waves and other severe weather events.

  • Causes of Extremism Spike in U.S. Military Examined in New Study

    A new study from the University of Maryland’s National Consortium for the Study of Terrorism and Responses to Terrorism found a sharp increase in the number of former members of the U.S. military who are linked to extremist groups and activities. Michael Jensen, a co-author of the study, said that the problem of extremism is primarily a problem among veterans, not a problem in the ranks of those who are currently serving.

  • Homes in Floodplains Are Overvalued by Nearly $44 Billion

    Analysis of sales data and flood risk data over two decades indicates that housing markets fail to fully account for information about flood risk. The findings suggest that policies to improve risk communication could influence market outcomes.

  • War, Terrorism, and Catastrophe in Cyber Insurance: Understanding and Reforming Exclusions

    Insurance is one of the most promising tools for addressing pervasive cyber insecurity. A robust market for insuring cyber incidents could, among other things, financially incentivize organizations to adopt better cyber hygiene—thereby reducing cyber risk for society as a whole. But cyber insurance, however, is not yet mature enough to fulfill its potential, Jon Bateman writes, and endless lawsuits hamper its effectiveness. Reforms and new solutions are sorely needed.

  • Waterfront Development Added Billions to Property Values Exposed to Hurricane Florence

    Rapid development in flood-prone zones during recent decades helped boost the amount of property exposed to 2018’s devastating Hurricane Florence substantially, a new study says. It estimates that the value of property in North Carolina and South Carolina potentially exposed to flooding at $52 billion—$42 billion more than at the start of the century (in 2018 dollars). While much development took place between 1950 and 2000, financial risk rose quickly afterward because much of it clustered along coastlines and adjacent to rivers and lakes, where buildings were more vulnerable to flooding.

  • Pandemic Bonds: The Financial Cure We Need for COVID-19?

    Like other financial players that have embraced innovation in recent years, insurers too have developed novel tools and products. One such innovation is catastrophe bonds. A catastrophe bond provides the issuer (usually either an insurer or a reinsurer) with financial protection in case of a major catastrophe. Most catastrophe bonds cover extreme natural events such as hurricanes or earthquakes, but some bonds cover pandemics like the one the world is facing now.

  • Time 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.

  • Extreme 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.

  • 2019: 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.

  • Comparing 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.

  • The 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.