How The Insurance Industry Financials Show Climate Change Disasters Are Not Happening

If you believed all the climate change and global warming disaster predictions ever told the last 20 years, you’d think we would be in Armageddon.Of course we are not. Economically, lets look at signs if climate change predictions were unraveling right before our eyes. One of the biggest indicators would be people claiming damage from storms or flooding to their insurance companies. It’s not happening. This time of year, 2017 stats start rolling in from what the insurance industry did in 2017. While examining a detailed report from Deliotte.com, I came across this piece of data.

US property-casualty (P&C) insurers saw underwriting losses more than double, to $5.1 billion, for the first half of 2017 compared with the year before—an even more dramatic downturn when you consider the industry was in the black on underwriting by $3.1 billion during the same period two years ago.Soaring loss costs, led by higher catastrophe and auto claims, drove net income down 29 percent in the first half,2 and this was before huge third-quarter disaster claims from Hurricanes Harvey, Irma, and Maria. These storms reverberated globally, particularly within the reinsurance sector, as did claims from other massive natural disasters outside the United States, most notably September’s earthquake in Mexico.

 On the other hand, a soft market beyond auto and property-catastrophe lines continues to prevail, with global insurance renewal rates falling for the seventeenth consecutive period in the second quarter of 2017.3This appears mainly due to an overabundance of capital, particularly in the US market, with industry surplus as of June 30 at an all-time high of $704 billion.4 Even record storm losses would be unlikely to put more than a temporary dent in those reserves, most likely making recent hurricanes earnings events rather than serious capital concerns for most primary insurers—although reinsurers and those issuing insurance-linked securities may be harder-hit over the long-term as mounting catastrophe claims are settled.
While the industry faced costs from the 2017 hurricanes, the big money hit is mostly from the auto claim side. Deeper into the report, it talks of how the newer automobiles being more expensive to fix because of the new technology in it. Overall, the industry surplus is approaching $1 Trillion. If dire predictions of climate change were happening, the payments on claims would be tremendously higher.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s