The reinsurance market is being forced to re-evaluate risk models because of heavy losses from natural catastrophes, climate-change risk and long-tailed losses from events such as Hurricane Michael, which hit Florida in October 2018 causing losses more than 45% higher than initial estimates. “Insurance companies are having a hard time making money on the policies they sell due to these events,” said John Deasy, senior vice president at Fitch Ratings. There is a significant, impending degree of change that is to come with climate change, technological disruption, the shift from tangible to intangible assets and the transfer of liability from individuals to large manufacturers. The unpredictability of climate change could threaten whether extreme weather events can still be insured.
The reinsurance market is being forced to re-evaluate risk models because of heavy losses from natural catastrophes, climate-change risk and long-tailed losses from events such as Hurricane Michael, which hit Florida in October 2018 causing losses more than 45% higher than initial estimates. “Insurance companies are having a hard time making money on the policies they sell due to these events,” said John Deasy, senior vice president at Fitch Ratings. The unpredictability of climate change could threaten whether extreme weather events can still be insured.