US Tornado’s total US$ billion + losses for insurers.
You would have seen the extensive damage in Kentucky and 6 other US states from the 30+ tornadoes that swept across this wide area during the 9th and 10th of December.
Tornadoes this time of the year are rare, but the tornado period is clearly lengthening year on year.
These storms mark the 10th US$ billion storm event this year in the United States. Only 2020 had more with 13.
What concerns me is that the level of insurance protection in the United States has steadily fallen since the 1960’s. The question then is how do the uninsured recover?
Add to this the severe forest fires that both the US and Canada experienced during their summer, and you can understand why property insurance premiums are not likely to fall soon.
What we have to stop doing, and this does not just apply to the US but anywhere that severe storms, hurricanes, cyclones, and the like occur, is not put back what was there and expect a different result next time.
I see this particularly in the Pacific Islands where a cyclone comes through, insurers and donations poor in and they just put back the same as before only to be blown during the next cyclone.
Whether you believe in climate change or not, the reality is that there has never been a more important time to embrace risk management. As always the catchcry should be, hope for the best but plan and insure for the worst.
PS I was taken by the fact that a family photograph was blown 250 miles from the home it was in as a result of one of the tornadoes. The photo landed on the windshield of a car and through social media the photo was able to be returned to its rightful and grateful owners.
You’re spot on Allan. While I agree with you I think there are compounding issues. Many existing residential structures may perhaps be made safer with retro-fitting to bring dwellings up to a more robust standard against the relevant natural catastrophic hazard. The problem is cost because all of this work must be undertaken by professionals. Government and the insurance industry need to review incentives to encourage a financial breathing space in which this work can be undertaken. My suggestion would be a significant one-off Tax Reduction and a genuine premium reduction by insurers. My second point is a consideration of how we manage catastrophe reinsurance in a country like Australia. I think we have to look at more innovative models. Many will argue that government intervention (e.g the proposed North Australian Reinsurance Pool) is financial free-enterprise sacrilege. We have not seen the final model yet and while there is some justified skepticism, the germ of the idea has not only potential, but in my view, it will become an essential underpinning of property insurance in Australia.