Insurers: El Nino is here. Are you prepared?
You’ve heard about El Niño, the weather phenomenon which creates extreme droughts and devastating typhoons. For insurers, El Niño means something more than warmer temperatures and increased storms.
If you are an insurer in the U.S., you’ve experienced or watched in dread as two typhoons in the eastern Pacific caused $4 billion in economic damage just last month (August 2015) and the ongoing drought in the West has caused $3 billion in losses so far.
Now, we’re being hit by a mean boy (yes, El Niño) that is expected to be one of the worst on record.
But please, let’s think positive – and make sure we’re prepared – while we take a look at 10 major natural disasters (listed least to most impactful) predicted in the near future:
10 Wildfires, U.S., 2015 – 2050
9 Baroarbunga Volcanic Explosion, Iceland, 2014
8 Megathrust Earthquake, Chile, 2015 – 2065
7 Twin Earthquake, Japan, 2017
6 Mt. Fuji Eruption, Japan, 2015 – 2053
5 Earthquake – Tsunami Split, Oregon, 2015 – 2065
4 East Coast Submersion, U.S., 2050 – 2100
3 Largest Tsunami Ever, Caribbean, Unknown
2 The “Big One,” California, 2015 – 2045
1 Major Solar Storm, Earth, 2015 – 2025
Looking back, we can see what’s coming
In 2011, global catastrophic events caused more than $370 billion in economic losses. With the second-largest in history still fresh in our minds, concern will continue to weigh heavy on insurers as prediction accuracy increases and the threat of these major events looms on the horizon. Whether it is treaty or facultative, reinsurance placement will continue to increase in importance for every carrier in the world – no one is excluded.
So, what can insurers do to become more effective in their reinsurance placements?
Top of my mind is to search for ways to help the industry better manage their reinsurance process. We should be fighting the beast of inefficiency in our organizations, not battling the forces of nature.
If you are in the insurance industry, you might need a drink after this. But if you are at CommunityLIVE, you’ll get something better than a 20 YO single malt scotch.
Don’t miss our session, “OnBase Reinsurance Solutions” Thursday at 10 a.m. if you want to find out how your organization can become more efficient and effective.
We’ve got you covered. (Pun intended.)