The close of 2017 marks the end of one of the worst years for insured disasters in recent history. Three major hurricanes in quick succession – Hurricanes Harvey, Irma and Maria – wreaked havoc in the Caribbean, Puerto Rico and the US with devastating winds, extreme rainfall and resultant flooding. These events happened at the same time as powerful earthquakes in Mexico and were followed by unprecedented wildfires in California. Together these disasters affected the lives and livelihoods of millions of people and led to some of the largest insurance industry losses to date. It is estimated that the total property insurance market losses for 2017 will exceed USD 100 billion globally, making it, in absolute terms, one of the worst insurance loss years on record1. The economic losses for the events of 2017 will sadly far outweigh the insured losses, including in the mainland US with one of the most developed insurance markets in the world2,3. This means the cost of the uninsured portion of losses will fall to governments, corporations and individuals to manage....Read whole article here
Having demonstrated their value following the 2017 hurricane season, the market for insurance-linked securities, including cat bonds, is set to grow substantially this year.