Market Overview

A.M. BestTV Special Presentation on Catastrophe Insurance: The 'Cat' Grows a Longer Tail

Share:

In this special A.M.BestTV episode, insurance industry
experts, modelers and government officials examine the mix of
litigation, legislative initiatives and governmental interventions that
have changed the rules for many worldwide disaster claims. Click on http://www.ambest.com/v.asp?v=longtail2018
to view the entire program.

Rising property values and a greater concentration of people in
catastrophe prone areas have increased the cost insurers have to pay to
recover from natural disasters.

"Catastrophe insurance is becoming more long tail," said Robert
Muir-Wood, chief research officer, Risk Management Solutions.
"Increasingly, events, especially some of the largest catastrophes where
losses just keep rising and rising long after the events occurred, are
causing catastrophe insurance to become long tail."

Robert Hartwig, director, department of finance, University of South
Carolina, said he believes that this trend is problematic for insurers
pricing property catastrophe and property business in general. "Insurers
make the assumption that these claims are going to be filed and closed
relatively quickly," said Hartwig. "That becomes increasingly impossible
as catastrophe insurance becomes long tail."

All participants agreed that in order to price insurance products
appropriately, certainty is needed. Without it, they said, the industry
has to price products according to the worst common denominator, which
can result in unnecessary costs to insurers and consumers.

Also appearing in this episode:

  • David Sampson, president and chief executive officer, Property
    Casualty Insurers Association of America;
  • Steven Weisbart, senior vice president and chief economist, Insurance
    Information Institute;
  • Fred Karlinsky, co-chair, insurance regulatory & transactions
    practice, Greenberg Traurig, LLP;
  • Sean Shaw, lawyer, property insurance claims, Merlin Law Group; and
  • Christopher Draghi, financial analyst, A.M. Best.

Recent episodes of A.M.BestTV include:

  • New Technology and Business Models Help Grow Life Business in Asia,
    Says Sun Life's President and Chief Executive Officer
    : Dean
    Connor, president and chief executive officer, Sun Life Financial
    Inc.,
    said the company's early roots in some Asian markets are
    being enhanced by several new product initiatives and technology: http://www.ambest.com/v.asp?v=connor718.
  • How Insurers Are Managing Multiple Distribution Channels: The
    shift of sales to multiple, diverse channels affects areas such as
    underwriting, technology and the overall agent experience: http://www.ambest.com/v.asp?v=distributionchannels718.
  • Insurers in Africa Face Reinsurance, Risk Management Challenges,
    Says A.M. Best Analyst
    : Rishwinder Grewal, financial analyst, A.M.
    Best, said some insurers operating in the sub-Saharan region of Africa
    are incorporating enterprise risk management (ERM) into their
    operations, but must expand beyond individual silos: http://www.ambest.com/v.asp?v=africa718.
  • Rated Caribbean Insurers Stand Up to String of Storms, Say A.M.
    Best Analysts
    : Meg Mulry, associate director and Ricardo
    Longchallon, senior financial analyst, A.M. Best, said rated insurers
    in the Caribbean region saw profits drop with manageable decreases to
    surplus after enduring a stormy 2017: http://www.ambest.com/v.asp?v=caribbean718.

A.M.BestTV covers exclusive A.M. Best information and
reports, targeted topics and key developments in the (re)insurance
industry every Monday, Wednesday and Friday. Sign up for alerts of
episodes at http://www.ambest.com/multimedia/ambtvsignup.html.
View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Company, Inc. and/or its
affiliates
. ALL RIGHTS RESERVED.

View Comments and Join the Discussion!