Hurricane season approaches, insurers still weary of disasters
Atlantic hurricane season is scheduled to begin June 1 this year, a fact that has caused some concern in the U.S. insurance industry. Previous hurricane seasons have spawn devastating storms that have caused high levels of damage in many parts of the country. Last year, an active hurricane season played a supporting role in making 2011 the most disastrous year in recent history. Insurers have been weary of a repeat of last years’ season, latching onto reports suggesting that this year may be calmer than its predecessors.
Analysis suggests insurers able to withstand another disastrous season
Despite the concern rippling through the insurance industry, Fitch Ratings, a global rating agency, believes that U.S. insurers and reinsurers have the capacity to withstand another active season. According to the agency, insurers are adequately prepared to handle another year of disastrous storms spawned by the hurricane season despite losses seen over the past two years. The agency notes that the country’s property/casualty insurers and global reinsurance companies reported heavily losses due to past catastrophes, but that these loses would not mean the instability of the industry.
Previous disasters spurred changes to the insurance industry
The U.S. insurance industry underwent many changes in the wake of two consecutive years of powerful natural disasters. These changes brought about improvements in underwriting and pricing schemes, which made insurance policies more popular amongst consumers. Insurers also began taking a more aggressive role in promoting much needed coverage plans, such as flood and wind damage insurance. Risk modeling firms also produced more comprehensive models for the insurance industry, which allowed companies to respond to the needs of their particular market more effectively.
Assessment combines forecasts from other agencies and universities
Fitch’s assessment of the U.S. insurance industry is part of its forecast of this year’s hurricane season. The agency’s assessment includes forecasts from government agencies and researchers from the Colorado State University.
For more information on the 2012 hurricane season, Fitch Ratings’ assessment can be found here.