NEW YORK—Something, according to Rod Fox, “is going on here.”
Wildfires in unusual locations; the hottest months on record in more than a century; early storms in the Atlantic Ocean; flooding in areas without a history of flooding; and earthquake faults overdue for a temblor point to a troubling realization: “We won’t have benign [catastrophe] activity forever,” said Fox, managing partner and CEO of TigerRisk Partners.
“There’s a fire in the hole,” he said during his keynote address at Advisen’s Property Insights Conference.
For now, low insured losses from catastrophes are one reason the insurance rates remain soft; it is a buyer’s market. The “fire,” so to speak, according to Fox, could be the kind of major catastrophe to turn the market. Currently there is also significant capacity in the insurance and reinsurance marketplaces. Reinsurance rates were down from 3 percent to 5 percent at June 1 renewals, he observed.
Investors continue to see the insurance industry as a diversifying asset class. More outside capital can be expected to flow in. “You don’t stop that waterfall; you can’t stop gravity,” Fox said. “The future belongs to effective capital management.”
This story in an excerpt of the original. The content originally appeared in Professional Front Page News.
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Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
