Last year, U.S. P/C insurers incurred a $21.2 billion net underwriting loss, only slightly improved from a $24.9 billion underwriting loss recorded in 2022. Roughly $65 billion in natural catastrophe losses hit P/C insurers last year. The August 2023 Maui wildfires alone contributed an estimated $4-$6 billion in damages.
Executive Summary
Following up on his prior opinion piece, "It's No Longer Enough Just to Insure," Peter L. Miller, president and CEO of The Institutes, writes that predicting and preventing catastrophic events, as well as the day-to-day risks, is critical to the economic sustainability of insurers. In addition, he suggests that if there are ways to prevent the devastation of events like wildfires in Maui last year, then members of the risk management and insurance community "have an ethical and moral responsibility" to do so.As the severity and frequency of losses continues to increase exponentially, so does the cost to repair damages after a loss occurs. This is making insurance’s traditional approach of detecting and then repairing after a loss no longer economically viable.
Predicting and preventing catastrophic events, as well as the day-to-day risks we encounter, is critical to the economic sustainability of insurers. It is also crucial to helping our customers avoid catastrophes. If you’ve seen images of the aftermath of the wildfires that hit Maui or the Texas panhandle you would also agree that if there was a way to prevent this devastation from occurring again, we, as members of the risk management and insurance community, have an ethical and moral responsibility to act on it.
