Marine insurance takes a grievous blow from Hurricane Sandy
It has been nearly six months since Hurricane Sandy struck the U.S. and losses from the powerful storm are still being reported and tallied. The storm, which hit the East Coast in October 2012, caused widespread flooding throughout several states, but the storm surges created by the storm also had a powerful impact on the marine market, and not just in the U.S., but around the world. The International Union of Marine Insurance has released a new report highlighting the global impact of Hurricane Sandy.
Natural disasters send ripples through global insurance market
Powerful storms typically have an effect on the global insurance industry, as many of the world’s largest insurance companies are tied to one another in some form. This is also due to the fact that natural disasters tend to put more strain on global resources and the transportation of these resources. The 2012 U.S. drought, for instance, had an impact on the global food market as much of the produce that would have been exported from the U.S. never actually left farms. Hurricane Sandy is another natural disaster that has had a marked impact on the global marine insurance sector.
Hurricane Sandy nullifies 2012 marine insurance premiums
According to the International Union of Marine Insurance, hurricane Sandy cost the global marine insurance market approximately $3 billion. This sum effectively nullifies the premiums that the marine insurance industry had collected from the entirety of the U.S. market throughout 2012. The report suggests that Hurricane Sandy will have a major impact on the future of underwriting in the marine insurance sector, especially as these powerful storms become more frequent. The report also notes that the full extent of marine damage caused by Hurricane Sandy has not yet been fully realized.
Several other disasters cause stress for marine insurance sector
The marine insurance sector has suffered a number of disasters over the past year. The loss of the cruise ship Costa Concordia was considered the largest event of 2012 in terms of losses, before Hurricane Sandy. The establishment of new deep sea oil rigs also had an impact on the marine insurance sector as disasters at these rigs spurred numerous claims.