Flooding — Insured Losses Increasing

The Swiss Re Institute recently took a look at flood losses in the last 10 years complete statistics were available. From 2011 to 2020, Swiss Re says insured losses doubled from $40 billion to $80 billion.

In 2021 alone losses worldwide were $20 billion.

The institute says growing economies, more population and the urbanization are responsible for most of the losses. Climate change and increased rainfall because of climate change are also being blamed.

Keith Wolfe is the president of US P&C at Swiss Re. He said losses between 2011 and 2021 hit $99 billion. Only 18% of losses worldwide were insured.

“The recent events in Kentucky, Mississippi and Texas are a sad reminder of how devastating floods can be to our lives,” Wolfe said. “Despite the private flood insurance market gaining traction over the last few years, too many people are still not covered for flooding, and the majority of those impacted by these events are uninsured, leaving them to pick up the pieces at their own expense.”

The whole problem isn’t climate change. A lot of it is where people are settling.

• *40% of the current U.S. population lives in coastal areas
• *10% of that 40% live in flood plains

“The incentive for the insurance industry to protect more households in the US is twofold,” Wolfe said. “First and most importantly, the insurance industry can play a significant role in helping communities get back on their feet following a disaster. In addition, this business can now be underwritten with greater confidence than ever before thanks to significantly improved modeling.”

The institute points out that the National Flood Insurance Program (NFIP) insures the lion’s share of homes and businesses in the U.S. It took in $4.7 billion in premiums last year. The private market is under half that at $2 billion.

In the next decade the prediction is that the private market could bring in $37 billion to $40 billion.

Source link: Insurance Business America — https://bit.ly/3UaLjKH