Home » Posts tagged with » Property & Casualty Insurance
The rise of cat bonds and other “insurance-linked securities” is starting to affect the price of insurance, particularly on the reinsurance side. Some weathered insurance executives are warning that naive investors are distorting prices, creating a frothy “shadow insurance” sector with systemic implications.
Flood insurance rates will have to rise quite a bit to reflect the actual risks of flood damage. At some point, America will have to manage these costs. They cannot just constantly rebuild every flood-prone area, especially if it becomes increasingly unlivable. Sadly, Congress is preparing to make the politically expedient choice of doing nothing.
The National Flood Insurance Program (NFIP) was added to GAO’s high-risk list in 2006 and remains high risk due to losses incurred from the 2005 hurricanes and subsequent losses, the financial exposure the program represents for the federal government, and ongoing management and operational challenges.
Water is never far from the news these days. At the World Economic Forum in Davos this year, experts named water risk as one of the top four risks facing business in the twenty-first century. Major companies are already seizing on water-risk data. The message is clear: water-risk management is shifting into the mainstream of business practices.
There was no question that the nation’s troubled flood insurance program needed an overhaul when Congress passed legislation last year to eliminate many of the subsidies that had put the program about $25 billion into debt. But these reforms offered too much tough love and too little compassion for flood-prone homeowners.
In May the concentration of carbon dioxide in the atmosphere reached 400 parts per million, the highest since three million years ago. Sea levels then may have been as much as 65 feet above today’s; the Northern Hemisphere was largely ice free year-round. Unless we change course dramatically in the coming years, our carbon emissions will create a world utterly different in its very geography from the one in which our species evolved. By the next century, if not sooner, large numbers of people will have to abandon coastal areas in Florida and other parts of the world. Some researchers fear a flood tide of climate-change refugees. We’re going to see civil unrest, war. You just wonder how or if civilization will function. How thin are the threads that hold it all together? How do you get people to realize that Miami—or London—will not always be there?
Insurers have long claimed to be the financial world’s shock absorbers, there to contain the carnage periodically unleashed by their banking brethren. Regulators have left them on the fringes of sweeping post-crisis reforms that have reshaped much of the financial sector. Until now.
Hurricane Sandy, the monster storm that hit the Atlantic Seaboard on Oct. 29, left at least 159 dead and caused $65 billion in damages. But as a presidential task force made clear this week, Sandy cannot be considered a seasonal disaster or regional fluke but as yet another harbinger of the calamities that await in an era of climate change.
Governments around the world have been investing in plans to “climate-proof” their cities against weather-related calamities. Even if we managed to stop increasing global carbon emissions tomorrow, we would probably experience several centuries of additional warming, rising sea levels, and more frequent dangerous weather events.
The mission of the International Insurance Relations Committee is to strengthen the international insurance regulatory system and provide a forum for cooperative efforts between the NAIC, international regulators, and multi-national associations of regulators on issues of mutual interest.
The mission of the National Association of Insurance Commissioners (NAIC) Reinsurance (E) Task Force is to monitor and coordinate activities and areas of interest, which overlap to some extent the charges of other working groups, specifically the International Insurance Relations (G) Committee.
The mission of the Property and Casualty Insurance Committee is to monitor and respond to problems associated with the products, delivery and cost in the property/casualty insurance market and the surplus lines market as they operate with respect to individual persons and businesses.