Oldwick, NJ–(business wire) – Secondary risk events are becoming more influential and causing a significant amount of insured loss, affecting the bottom lines of underwriters of personal and commercial lines of property, according to one. AM Best Vaccination.
New one best commentary, titled, “Secondary Threats Increasingly Responsible for the Greatest American Disasters,” notes that although trends in more frequent and damaging disasters are a global issue, the United States ranks among the most intense and most influential natural disasters in terms of total continues to face many. loss and insured loss. Additionally, demographic changes and population growth in coastal or other areas that have proved catastrophic have increased the magnitude of economic and insured losses. “As we have seen with population growth in areas exposed to wildfires in California and other western states – including the recent fires in Colorado – natural disasters of low intensity are incurring high economic and insurance losses,” said David Blades. Said AM Best, associate director, industry research and analysis.
According to the commentary, early estimates for 2021 damages from natural disasters exceed $105 billion, which would make it the fourth-largest annual total since 1970. Over the past 40 years, a clear pattern of more frequent, significant natural disaster events have emerged, with this trend increasing rapidly over the past decade. Insurance companies with exposure to these secondary risk exposures such as wildfire, tornado and strong thunderstorms will face enterprise risk management concerns.
“The fact is that secondary perils are not created in the same way as primary perils, although this modeling is evolving, and insurers are taking action to address the exposure to these risks through underwriting and pricing actions,” John Andre, Managing Director said. AM Best.
In the near term, insurers could see higher insured losses from inflation that elevates the value of exposed assets, as well as continued demographic shifts in high-risk geographic and aging construction stocks. The impact of these trends is also reflected in reinsurance pricing on primary companies, particularly in loss-prone areas.
To view a full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=316561.
AM Best is a global credit rating agency, news publisher and data analysis provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.
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