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SNS: The End of Insurance

SNS: The End of Insurance


In This Issue
Week of 2/10/2020
Vol. 25 Issue 6

The End of Insurance

  • Delayed Reaction: The State of Insurance
  • Reinsurance: The Canary in the Coal Mine
  • The Changing State of “Cat Bonds”
  • Signs of Coming Trouble for the Insurance Industry
  • Reinventing Insurance
  • About Berit Anderson

The Viral Economy, Part 2

The End of Insurance

How a climate of financial instability is driving unprecedented global losses in the insurance and reinsurance industries

by Berit Anderson

While politicians and lobbyists argue endlessly about whether climate change is human-caused, there is one industry in particular already feeling the financial burden of global climate change: homeowners insurance.

“Despite the manageable impact for insurers, the catastrophic fires highlight that the P&C insurance industry is at the forefront of environmental risk…. The industry is exposed to the economic consequences of climate change, primarily through[its] unpredictable effect … on the frequency and severity of weather-related catastrophic events, such as hurricanes, floods, convective storms, drought, and wildfires.”

– Frank Mirenzi, VP and Senior Credit Officer, Moody’s

Insurance companies around the world suffer direct financial impact whenever a wildfire swoops across Australia or Northern California or a hurricane makes its way up the Eastern Seaboard. And, although most people don’t realize it yet, the numbers at these companies provide perhaps our most accurate real-time indication of the global impacts of climate change. In fact, things have gotten so dire in home insurance that we feel it merits its own discussion as an industry.

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