Perilous
Times and Climate Change
U.S. storms generate up to $7B in insurance losses in May
Reuters
2:23 PM CDT, June 6, 2011
A week of severe thunderstorms and tornadoes across the United
States in late May generated $4 billion to $7 billion in insured
losses, catastrophe modeling company AIR Worldwide said Monday.
It is the latest blow to an insurance industry that has suffered
unprecedented losses this year from disaster after disaster --
floods and cyclones in Australia, earthquakes in New Zealand and
Japan, unrest in the Middle East and record-breaking tornado
activity in the United States.
Insurance brokerage Guy Carpenter said last week that 2011 losses
for reinsurers, as a group, were already more than double their
full-year forecast.
AIR Worldwide said the two major U.S. tornado outbreaks this year
-- the late May events and a series in late April -- were the
costliest in history.
Taken together, the disasters this year are forcing higher prices
in the insurance industry after years of sharp declines.
All eyes in the industry are now on the Atlantic Ocean after the
start of hurricane season last week. Many in the industry believe
a major hurricane, which the United States avoided the last two
years, would dramatically accelerate the return of pricing power
for insurers.
The S&P insurance index was down 1 percent in afternoon
trading, with nearly all the index components lower. The index is
off 2.8 percent this year, compared with a gain of 2.7 percent for
the S&P 500 index.
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