Commercial insurance companies should not be surprised to see buyers reduce their premium spending across lines if they continue to tap out of difficult-to-insure risks like pandemics, Zach Finn, clinical professor of risk management and insurance at Butler University, tells Richard Cutcher in episode 38 of the Global Captive Podcast.
A new report from Kroll Bond Rating Agency suggests that the (re)insurance industry remains sufficiently capitalized and is generally well-positioned to manage through current catastrophes, including hurricanes, wildfires, and the COVID-19 pandemic. The continuing increase in hurricanes' severity will lead to another year of high catastrophe losses for insurance companies.
The average annual losses from natural catastrophes have increased dramatically in recent years, but the increased amounts of insurance penetration can have a dramatic impact on recovery time. A new report notes that average annual catastrophe losses rose from $27 billion in 1970–1980 to nearly $200 billion in 2010–2020.
The government of Haiti has received a payout of approximately $7.2 million from the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) on its excess rainfall parametric insurance policy. The payout is related to 3 days of heavy rainfall associated with Tropical Cyclone Laura.
A major catastrophe combined with the impact of the COVID-19 pandemic could prove to be a capital event for some reinsurers, according to a new comment from S&P Global. Insured losses and investment volatility related to the COVID-19 pandemic have already eroded much of the global reinsurance industry's earnings buffers.