Last year’s (2017) unprecedented natural disasters around the world exacted a huge human loss as well as an economic one.
MS Amlin’s Global MD for Marine and Aviation explains what this means for the insurance industry this year.
Last year our fragile planet was rocked by hurricanes, typhoons, earthquakes, floods and wildfires that caused misery and hardship for millions of people, and the economic loss was enormous, too. Some experts suggest it may be the costliest year on record, with over US$130 billion of insured loss.
The support given by insurers to clients in such times can help to rebuild homes and businesses, replace lost possessions and repair damage. However, given the varied nature and size of some of the disasters, the support needed by clients in 2017 was unprecedented.
The catastrophe losses have come at a bad time for insurers. The rating environment is what we call in the industry “very soft”, with margins across a number of different lines of business becoming extremely thin, or even non-existent. To then add a further $130 billion of losses to what has become a marginal business – this calls for some changes.
Over the next few months you may well see an increase in price for the insurance products you buy. The overall price, with perhaps an increase, will be a fair reflection of the risk that we are assuming, to ensure that we are able again to respond should 2018 witness natural catastrophes similar to those in 2017, but also to ensure that the insurance market is here to support you for the longer term.
Let us not forget: insurance is a product built around the premiums of the many, paying for the losses of the few. We, in the insurance industry, hope our clients rarely need to call upon their insurance products, but if and when they do, we will be there to support them in their hour of need.