According to the Insurance Information Institute, the uneventful 2006 hurricane season has led insurers to set aside billions of dollars in order to strengthen their claim-paying capacity for the next 15-20 years.
The I.I.I estimates property/casualty insurers raised its overall claim-paying resources by $55.7 billion last year, compared to the record $62 billion increase in 2003 used to recover from the effects of the terrorist attacks on September 11.
“Excellent underwriting results, the substantial drop in catastrophe losses and strong investment performance enabled insurers to reinvest billions of dollars in 2006, allowing claim-paying resources to reach an all-time record high estimated at $481.5 billion,” said Dr. Robert Hartwig, president and chief economist for the Insurance Information Institute, in a release.
The I.I.I found that the source of the reinvested funds is primarily profits earned in 2006 and investment gains as well as new capital from investors.
The I.I.I reported that insurers paid out more than $80 billion on insured losses during the 2004 and 2005 hurricane seasons. Dr. Hartwig added, “The industry is bolstering its capital position in advance of what is already predicted to be a 2007 hurricane season that is 40 percent above average.”
Interested in more catastrophe news and in-depth articles? Head over to Claims' catastrophe channel for more information.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
