A Global Conversation
Focus on Catastrophes

“We saw such wide scale impact of the fires that played out. The Woolsey Fire down in Los Angeles County, and obviously, the Camp Fire there in Paradise, California. I traveled with our forensic team in December and walked through those neighborhoods. It's hard to explain what it means when 90% of the structures are gone. The closest corollary is an EF5 tornado that came through. The research we've been doing at the Insurance Institute for Business and Home Safety, looks to understand the losses, and work with the modelers, so that they can understand what to do with in terms of expected losses. Then ironically, we come back to the roof. When those embers, those flying charcoal pieces come at you, the real danger is when that gets up into your attic.

That gets up into the soffit and eaves, and that's how homes just begin to blow. That's what we saw over and over again.”

Roy Wright
President and Chief Executive Officer
Insurance Institute for Business & Home Safety

“The challenge is, right now, not enough people at the upper end of the capital supply chain have been able to fully understand cyber yet because you're not living in the data center day-to-day. The models are evolving and doing a great job of evolving, but it's not as established as property catastrophe yet. You've got a lot of capacity that's got a lot of learning to do, which takes time, when you're tending to your book, especially following [hurricanes] Harvey, Irma, and Maria.”

Tom Johansmeyer
Assistant Vice President
Verisk

“I see public announcements by some of the insurance companies that they're looking to reassess their exposure in wildfire-related areas. The reinsurers certainly are looking at the significant losses that they incurred from 2018.

From our perspective, we would like to see the legislature authorize the state to purchase catastrophe bonds or other kinds of prefunded solutions to deal with wildfire remediation, as well as recovery and the cost of recovery for wildfire.”

Frank Nutter
President
Reinsurance Association of America

“From a property standpoint, what we would expect to see is that in light of the recent spate of fire and hurricanes over the last two years, that companies will continue to reevaluate their underwriting strategies and their risk tolerances. This, in turn, could lead to an increase in non-renewals or a significant increase in the rate activity.

We'd also expect to see the prevalence of dedicated cat specialists to increase, and also those companies focused on segments of the property markets to increase as well, such as high-net-worth segments.”

Greg Williams
Senior Director
AM Best

“One of those which is on everybody's mind these days is climate change. What is climate change? What impact is climate change having on natural catastrophe losses? We all know we've seen an increase in hurricanes, we've seen a dramatic increase in hail and wildfire, and of course, there's flooding. We're going to take a look at what's happening with climate change, what's the forecast for climate change and what impact is that going to have on catastrophe losses.”

Kevin O'Brien
President and Chief Executive Officer
Inland Marine Underwriters Association