30 November 2017Insurance

Recent catastrophes highlight protection gap, says forum held at Lloyd’s

Around 100 insurance industry experts, policy makers, scientists and environmentalists gathered at Lloyd’s of London on November 29 to address the rise in nat cat events during the 2017 Atlantic hurricane season.

They addressed strategies for improving nat cat resiliency and closing the the protection coverage gap at the “Improving Natural Catastrophe Resiliency: Insurance vs Intervention” forum, sponsored by Renaissance Re.

“2017 will be the third year having more than $100bn of insured losses over the previous fifteen,” said Kevin O’Donnell, president and CEO of RenaissanceRe. “This recent loss activity demonstrates the value of private insurance but also highlights the protection gap. Growing the insurance pool and closing the gap in the developed world requires a coordinated effort among law-makers, insurers, reinsurers, academics, scientists and private citizens alike, which is why forums like these are so important.”

John Huff, the immediate past president of the National Association of Insurance Commissioners (NAIC) spoke about the unintended consequences that occur when intervention makes matters worse.

Huff said: “The success of any resiliency planning effort depends on coordination and education. All of us, from regulators to insurers, to businesses and consumers, have a role to play in this process. Efforts such as the Risk Mitigation Leadership Forum Series play a pivotal role in helping to educate people and communities around the world about the importance of risk mitigation and adaptation.”

The director of operation for Flood Re, Aidan Kerr, shared examples of best practice for partnerships between the public and private sectors to make flood insurance more available and affordable.

“Flood Re is committed to providing information to improve people’s understanding of their flood risk and how they can take action to manage and reduce their risk.

“Thanks to the establishment of Flood Re there is now a greater choice of affordable home insurance policies for householders at risk of flooding. Our mission is to help Government, local authorities, insurers and communities to work together to become better prepared for future flooding. To transition to a risk-reflective model by 2039, we need a wide ranging and inclusive approach encompassing land planning, sustainable drainage, sustainable development and effective flood risk management.”

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More on this story

10 April 2018   The protection shortfalls in cyber and healthcare risks are more dramatic than for natural catastrophe risk, according to the study “Understanding and Addressing Global Insurance Protection Gaps” released by The Geneva Association.
6 September 2018   Broker Aon’s reinsurance solutions business has launched its public private enterprise (PPE) specialty practice to address the global insurance protection gap.
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