Aon has reported that insured losses from natural disasters reached a 10-year high of $42 billion in the first half of 2021, but overall economic losses came in below the 10-year average. The US accounted for 72% of the losses.
The partial collapse of a condominium building in Surfside, Fla., is among the factors prompting insurers and economists to reconsider whether the risk in some areas of the US is too high to insure affordably, experts say. "Coastal areas all across the Gulf and up along the East Coast could start to see very similar dynamics" to those in Florida's insurance market, said Carolyn Kousky of the Wharton Risk Center at the University of Pennsylvania.
Wildfires in California have produced commercial property losses in excess of $4 billion in 2017, 2018 and 2020, and losses could be higher this year, according to an AM Best report. In recent years, insurers have encouraged the use of various wildfire mitigation tactics such as the trimming of vegetation and the use of fire-resistant fencing.
The Dixie Fire, the largest wildfire burning in California, has merged with the Fly Fire and continues to cause property destruction in Northern California. In Oregon, the Bootleg Fire has burned at least 70 homes and remains the biggest wildfire nationwide, while Montana is getting help from other states as wildfires threaten homes.
Coastal communities that don't improve flood defenses can expect seven to 15 days of high-tide flooding annually by 2030 and 25 to 75 days of high-tide floods per year by 2050, according to the National Oceanic and Atmospheric Administration. Coastal communities are experiencing double the number of high-tide flooding days that they saw two decades ago, NOAA says.
Climate change has been a key focus of the insurance industry as it tackles environmental, social and governance issues, including Aon's goal to achieve net-zero greenhouse gas emissions by 2030. "We want to help using the risk mitigation skills we have, the risk transfer capabilities, the access to alternative capital, modeling to be able to help these clients as they transition," Aon President Eric Andersen said.
Aon's Technology & Communications Industry Practice hosts a monthly roundtable each month to discuss topics that are of primary interest to technology and communication companies. In this session, Scott Takaoka, vice president of the Cyber Solutions Group, and Keeley Sidow, vice president and West Region leader, Cyber Solutions, discuss mitigating ransomware attack vulnerabilities and insurance implications.
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About Aon National Property
Aon’s National Property Practice is a collaborative team of 100 professional property brokers who combine their considerable
experience and expertise to place difficult and demanding risks. In addition to experience with every class of business and
every kind of loss record, Aon’s property brokerage team has significant expertise working with the risk and challenges of
natural catastrophic exposures, business interruption, terrorism and crisis management, risk control and claims advocacy.