The US Federal Emergency Management Agency (FEMA) declared 137 disasters in 2017. Unfortunately, many people have died as a result of these disasters and thousands continue to struggle with their troubled lives. In 2018, we hope for a full recovery for those displaced from their homes and businesses. The construction industry will play an important role in rebuilding homes and critical infrastructure, and insurance will play an important role in financing the restoration of this damage and securing this work.
Fortunately, the traditional insurance market and alternative sources of venture capital are still well-capitalized and sustainable. The Insurance Information Institute recently reported that the policyholder surplus hit an all-time high of nearly $ 720 billion despite catastrophic losses. As a result, they calculate that the industry has “nearly the highest claims settlement status in history”. No dramatic increase is expected in the wholesale market.
The damage consequences of both realized and anticipated non-natural disasters, including automobile liability, chassis fires, construction defects, supplier failures, construction and technology, social affairs, cyber security, and employment practices, can also have modest effects on the market. However, given the sufficient capacity available and the constant improvement of the analytics used in the underwriting, any changes should be measured and targeted. In short, all corrections should be much more targeted and less reactionary than they have been in the past.