Insurance Blog

Catastrophes outside the U.S. this year are costing insurers a lot more than domestic disasters – at least so far – with overseas carriers absorbing losses from Chile’s earthquake and the Deepwater Horizon oil spill, according to a Bloomberg report.
The article quotes Insurance Information Institute (I.I.I.) president Dr. Robert Hartwig saying:
“More years than not it’s the U.S. that has the greatest insured catastrophe loss. Global losses dwarfed U.S. losses this year.”

The Deepwater Horizon oil spill has been the defining event for man-made disasters so far in 2010.
Earthquakes in Haiti, Chile and the U.S., winter storms in Europe and the U.S., and severe floods in Eastern Europe are just a few of the events that have defined a very active first six months for natural catastrophes, according to Munich Re.
An overview of U.S. and global natural catastrophe activity for the first six months of 2010 will be jointly presented by Munich […]

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We’re nearly four weeks into the Atlantic hurricane season but so far the only storm activity has been in the Eastern Pacific where two hurricanes – Hurricane Celia (still Category 5) and Hurricane Darby (now Category 2) – have formed and continue to track out at sea away from land.
The Eastern Pacific hurricane season begins May 15 – a little earlier than the Atlantic hurricane season – and also ends November 30.
However, the Atlantic season may be about to kick into gear as the National Hurricane Center (NHC) this morning said there is a 70 percent chance that a low pressure system centered between the northeast coast of Honduras and Grand Cayman could become a tropical cyclone during the next 48 hours.
An air force reconnaissance plane is scheduled to investigate the disturbance later today to determine if a tropical cyclone has formed. The NHC reports:
Shower activity has become a little […]

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We’re nearly four weeks into the Atlantic hurricane season but so far the only storm activity has been in the Eastern Pacific where two hurricanes – Hurricane Celia (now Category 4) and Hurricane Darby (now Category 3) – have formed and continue to track out at sea away from land.
The Eastern Pacific hurricane season begins May 15 – a little earlier than the Atlantic hurricane season – and also ends November 30.
However, the Atlantic season may be about to kick into gear as the National Hurricane Center (NHC) this morning said there is a 70 percent chance that a low pressure system centered between the northeast coast of Honduras and Grand Cayman could become a tropical cyclone during the next 48 hours.
An air force reconnaissance plane is scheduled to investigate the disturbance later today to determine if a tropical cyclone has formed. The NHC reports:
Shower activity has become a little […]

Read the rest of this great post here

Most state natural catastrophe programs do not charge premium rates that reflect the full risk of loss, according to a new report by the Government Accountability Office (GAO).
GAO said that six of 10 states charged rates that do not fully reflect risk of loss, potentially discouraging private market involvement.
State natural catastrophe programs in Alabama, California, Florida, Louisiana, Mississippi, North Carolina, New Jersey, South Carolina and Texas were reviewed for the report.
GAO also found that while most states were taking steps to address mitigation, support of public policy goals varied across the programs.
Officials of nine of the 10 state programs reviewed told GAO they are addressing or considering mitigation, including providing mitigation credits or attempting to develop a more effective mitigation plan.
According to GAO, public policy goals are: charging premium rates that reflect the risk of loss; encouraging broad participation; encouraging the private market to provide natural catastrophe insurance; and encouraging […]

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Most state natural catastrophe programs do not charge premium rates that reflect the full risk of loss, according to a new report by the Government Accountability Office (GAO).
GAO said that six of 10 states charged rates that do not fully reflect risk of loss, potentially discouraging private market involvement.
State natural catastrophe programs in Alabama, California, Florida, Louisiana, Mississippi, North Carolina, New Jersey, South Carolina and Texas were reviewed for the report.
GAO also found that while most states were taking steps to address mitigation, support of public policy goals varied across the programs.
Officials of nine of the 10 state programs reviewed told GAO they are addressing or considering mitigation, including providing mitigation credits or attempting to develop a more effective mitigation plan.
According to GAO, public policy goals are: charging premium rates that reflect the risk of loss; encouraging broad participation; encouraging the private market to provide natural catastrophe insurance; and encouraging […]

Read the rest of this great post here

A new report from Aon Benfield ranks Cascadia in North America among the top five areas where mega-earthquakes of moment magnitude (Mw) 8+ are most likely to occur in the future.
The other regions most at risk are the Caribbean (Lesser Antilles), Chile, Indonesia (Sumatra), and Japan.
Aon Benfield notes that the last mega-earthquake on the Cascadia Subduction Zone occurred 300 years ago, just before the start of historical records for the region, but:
Whilst the short to medium term probability of a mega-earthquake may be low, there is potential for such an event in the future and insurers should not disregard the associated risks to the cities of the Pacific North West region.”

Aon Benfield goes on to say that insurance penetration in terms of earthquake cover runs at around 30 percent for both commercial and residential property in the Pacific North West.
Pricing is competitive and earthquake cover is probably running at half […]

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Speculation is mounting that the growing oil spill in the Gulf of Mexico following the explosion, fire and sinking of the Deepwater Horizon oil rig off the coast of Louisiana may prompt the declaration of a federal disaster. The Jackson Clarion Ledger reports that just as Mississippi Governor Haley Barbour submits a disaster declaration request to President Obama for last Saturday’s deadly tornado, another major disaster looms for Mississippi.
Latest reports suggest oil is leaking at the rate of 5,000 barrels a day from the damaged rig, not 1,000 as had been initially estimated and officials believe the spill could reach the coast of southeastern Louisiana as soon as Friday night. The Clarion Ledger reports:
The impact of the spill is a direct threat to the state’s shrimp and oyster fishermen and to some of the state’s most pristine and important wetlands. Those areas have only recently begun to recover from 2005’s […]

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The Los Angeles Times reports that more than 50 new surface earthquake faults have been discovered in California over the last two decades, according to a new state map produced by the California Geological Survey. The map is the first in 16 years, and offers a sober reminder of California’s quake risks, the LA Times article notes.
Its release comes just a few weeks after a 7.2 magnitude earthquake struck northern Baja California on April 4. The quake, which was centered south of California’s border with Mexico, swayed buildings as far away as San Diego, Loss Angeles and Arizona.
The LA Times observes that the new faults identified by the map range from small ones that don’t pose much threat for major temblors to very large ones:
Most of the faults have been known to researchers, and information on them is contained in scientific files. But state officials and quake experts hope that […]

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Colorado State University’s Tropical Meteorology Project team today upped its forecast for the 2010 Atlantic hurricane season, from its December predictions. The CSU team said the predicted weakening of El Niño conditions combined with a very strong anomalous warming of the tropical Atlantic are the primary reasons why it is increasing its forecast. In a season it expects will see above-average activity, the CSU team now expects 15 named storms – including eight hurricanes, four of which are expected to be major (Category 3-4-5) hurricanes. The probability of U.S. major hurricane landfall is estimated to be about 130 percent of the long-period average. There is a 45 percent chance that a major hurricane will make landfall on the U.S. East coast, including the Florida Peninsula, and a 44 percent chance of a Gulf Coast landfall from the Florida Panhandle west to Brownsville. The team also predicted an above-average (58 percent) […]

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At least 25 miners have been confirmed dead in an explosion at Massey Energy’s Upper Big Branch Mine in Raleigh County, West Virginia. The tragedy is being described as the worst U.S. mining disaster in more than two decades. Check out Ken Ward’s Coal Tattoo blog at the Charleston West Virginia Gazette for the latest on the Massey disaster. Just a week ago Workers Comp Insider blog had a timely post titled Mining safety: not just for China. It was prompted by the tragic story of 153 Chinese mine workers trapped underground in a flooded mine. In the past two days some 115 of the miners trapped for more than a week in the flooded Wangjialing mine in China’s northern Shanxi province miraculously have been pulled out alive. Sadly latest reports suggest rescue workers searching for survivors have also found five dead. Workers Comp Insider notes that while China’s mining […]

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