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- Insurance experts weigh Sandy's impact, current weather cycle
Hurricane Sandy and its remnants were a significant topic of discussion among a panel of insurance analysts at the PCI Annual Meeting. AIR Worldwide's Bill Churney said losses from Sandy would be "more significant" than those from Hurricane Irene, and Hemant Shah of Risk Management Solutions said that complicated issues will surface regarding coverage and deductibles. The East Coast may face more severe-weather events as conditions that generated Sandy persist, said Evelyn Browning-Garriss, a historical climatologist. "We have never seen the waters off the East Coast as hot as they've been this year," Browning-Garriss said. Business Insurance (tiered subscription model)
(10/30), Insurance Journal
(10/31)      
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Sandy may help support rate increases in 2013, Moody's says: The effects of Hurricane Sandy and its remnants are likely to bolster the case for increases in property/casualty insurance rates next year, Moody's Investors Service says. Major insurers will be able to absorb losses from the hurricane "with their capital strength intact," Moody's said. Losses from the storm could reduce P/C insurers' fourth-quarter earnings by 26% on average, according to Gregory Locraft, a Morgan Stanley analyst. Overall losses from the storm could hit $60 billion, according to forecasting firm IHS Global Insight. PropertyCasualty360
(10/31), Barron's (subscription required)/Stocks To Watch Today blog
(10/31), Time.com/The Associated Press
(10/31)
| Industry News | | |
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- Expert: Irene prompted more flood insurance purchases in Northeast
Hurricane Irene and its remnants were a "warning shot" about the need for flood insurance in the Northeast, and more people in the region bought such coverage after that storm last year, said Robert Hartwig, president of the Insurance Information Institute. "Nothing sells flood insurance like a flood. There will be many people in parts of the Northeast this week who will be very happy that they spent a few hundred dollars to buy flood insurance this year," Hartwig said. Insurance Journal/The Associated Press
(10/31)
- Report: IT budget constraints hit customer-centric efforts
While 69% of property/casualty claims executives said they are satisfied with their catastrophe-related data management, IT funding for customer-centric projects is lacking, according to a report by Aite Group. "The disconnect between demand and available budget clearly illustrates the fiscal constraints and competing priorities that all claims executives must balance. This conundrum is driving claims executives to focus on what they perceive to be the best opportunities in terms of return on investment and alignment with corporate strategy," said Stephen Applebaum, a senior analyst with Aite Group. Insurance Networking News
(10/31)
| Catastrophic Risk | | |
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- P/C insurers assess disaster-recovery plans, operations after Sandy
Property/casualty insurers are working in the wake of Hurricane Sandy and its remnants to determine the storm's implications for their disaster-recovery and business-continuity plans. Disaster-recovery plans are crucial for insurers, which should exercise such plans regularly, Novarica's Rob McIsaac said. "The value is not that you planned for the right event. What you want to do is free up your team so you have the intellectual capacity to focus on the things that are new and different this time around and allow you to make on-the-fly decisions around what needs to be done to recover from a particular event," McIsaac said. PropertyCasualty360
(10/31)
- Governors take action regarding deductibles after Sandy
Homeowners in New York, Connecticut and New Jersey will face lower deductibles after the states' governors said that Sandy should be considered a tropical storm by insurance companies. The National Weather Service reclassified the storm as a "post-tropical storm" shortly before it made landfall on the East Coast. Insurers' storm categories are "a risk-sharing mechanism," said PCI's Kristina Baldwin, adding that homeowners insurance prices would be more costly in storm-prone communities if hurricane claims are included in determining premiums. The New York Times (tiered subscription model)
(10/31)
- Sandy raises pressure to act on climate change, expert says
The federal government will be under pressure to mitigate the effects of climate change following the devastation to the East Coast caused by Hurricane Sandy and its remnants, said Sharlene Leurig of Ceres. While some scientists said they view Sandy as a rare combination of weather systems, other experts argued that global warming worsened the storm's impact. "Sea level rise makes storm surges worse and will continue to do so in the future," said Stefan Rahmstorf of the Potsdam Institute for Climate Impact Research in Germany. Reuters
(10/31), Reuters
(10/31)
| Policy and Law | | |
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- Editorial: NFIP may need Congress' help to pay Sandy-related claims
The National Flood Insurance Program appears likely to need financial help from Congress as the program might exceed its $20.8 billion borrowing limit in settling flood-damage claims from Hurricane Sandy and its remnants, according to this editorial. The NFIP first received a bailout in 2005 because of losses from Hurricane Katrina, and it faces "significant management challenges," based on a report from the Government Accountability Office last year, the editorial says. The Wall Street Journal
(10/31)
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