Post on 29-Jan-2015
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Large Property Loss Survey Vol atile w ea ther p a tterns ha ve p resented new cha l lenges
to i nsurers a round the w orld…
Sources: 1. PCS, iso.com 2. PCS – Top 20 List, iso.com
making it the 14th most costly disaster in U.S. history.2
There were costly weather events in the United States between the years 2010 to 2012
Flooding from Hurricane Irene led to much of its
$4.3 billion insured loss,1
There were costly weather events in the United States between the years 2010 to 2012
Total insured losses from Superstorm Sandy
were estimated between
$26 billion and
$35 billion.*
Sources: RMS & Reuters | "Hurricane_Sandy_New_Jersey_Pier.jpg" by Master Sgt. Mark C. Olsen/U.S. Air Force/New Jersey National Guard / CC BY 2.0.
$1 billion each event.
Over 11 thunderstorm and tornado events occurred with
insured values in excess of
There were costly weather events in the United States between the years 2010 to 2012
Sandy led to significant policy and Underwriting issues:
FEMA maps were out of date and did not accurately mark flood zones.
Underinsurance driven by a poor economy had a significant impact on economic consequences.
Less coverage for damage was due to inadequate flood sublimits and flood exclusions in homeowner’s policies.
Many Business Interruption policies did not cover losses caused by denial of access or loss of power.
Insurers were prohibited from applying Hurricane Deductibles due to storm not being defined as a hurricane.
Sandy also created overwhelming claims, causing legislative proposals that could change the way claims are handled.
Sources: "Sandy Poweroutage 1.jpg" by Hybirdd / CC BY-SA 2.0.
These proposals include:
Sources: "Sandy Poweroutage 1.jpg" by Hybirdd / CC BY-SA 2.0.
Time restrictions for insurers investigating claims
Curbing anti-concurrent causation language in policies
Allowing lawsuits against insurers for unfair claim settlement
Earthquake models failed to predict damage resulting from aftershocks and liquefaction.*
Sources: "2010_Chile_earthquake_-_Building_destroyed_in_Concepción.jpg“ by Claudio Núñez / CC BY-SA 2.0.
Global Perspective on Catastrophic Events: Earthquakes in Chile and New Zealand
*Liquefaction: The process where saturated soils lose their strength, causing it to behave like liquid.
In the case of Christchurch, New Zealand, liquefaction* caused significant additional damage to buildings.
Sources: "Liquefaction_on_roads_-_North_New_Brighton_centre_in_Christchurch_Feb_2011_quake.jpg“ by Martin Luff / CC BY-SA 2.0.
Global Perspective on Catastrophic Events: Earthquakes in Chile and New Zealand
*Liquefaction: The process where saturated soils lose their strength, causing it to behave like liquid.
The February 2011 aftershock in Christchurch caused an insured loss more than double the size of the original earthquake.
Sources: "Christchurch_Earthquake_Sevicke_Jones_Building1.jpg“ by Lee Hanner / CC BY-SA 2.0.
Global Perspective on Catastrophic Events: Earthquakes in Chile and New Zealand
Global Perspective on Catastrophic Events: Thailand flood and Japan Earthquake
Sources: RMS, PropertyCasualty360.
Extensive damage was done to businesses due to inadequate protection and preparation for flooding
along the Chao Phraya River in Bangkok, Thailand.
Global Perspective on Catastrophic Events: Thailand flood and Japan Earthquake
Large manufacturing risks named suppliers in their policy, causing insured loss to be higher than anticipated.
These claims were difficult to adjust and determine insured amounts.
Global Perspective on Catastrophic Events: Thailand flood and Japan Earthquake
Access to insured buildings was a problem, delaying assessment and business interruption
time and scope.
Global Perspective on Catastrophic Events: Thailand flood and Japan Earthquake
Sources: RMS, PropertyCasualty360.
The estimated loss was between $10 billion and $20 billion, making it the largest fresh water flood event in history.*
Summary: Lessons Learned
Insurers’ profitability will continue to be significantly influenced by extreme global
weather patterns.
Summary: Lessons Learned
Preparing, planning and implementing a catastrophe plan is necessary to respond to
a natural disaster.
Summary: Lessons Learned
Timely and effective catastrophe claim handling will aid policyholder retention and minimize the
likelihood of reactionary legislation.
Summary: Lessons Learned
There are issues that can impact claims dollars paid, including: scope of coverage, event facts,
underinsurance, sublimits, policy language and regulatory changes.
If we can help you evaluate the insurance or reinsurance implications of large losses, contact your Gen Re representative or anyone from our Property Claims Unit.
Mike Griffin michael.griffin@genre.com +1 203 328 5526
We welcome the opportunity to help you meet these new challenges.
John Harmonay jharmon@genre.com +1 203 328 5498
Sue Stein sstein@genre.com +1 203 328 5495
Geoff Piggot gpiggot@genre.com +44 20 7426 6166
This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.
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