The Makings of a Hard Market: A Timeline
8/30/2017
Hurricane Irma
> Category 5
> 5th costliest storm on record ($50B)
2017
Costliest Year on Record
for Natural Disasters
16 separate events, each causing
damages in excess of $1B1
2017
California Wildfires
9/16/2017
Hurricane Maria
> Category 5
> 3rd costliest storm on record ($90B)
8/31/2018
Hurricane Florence
8/10/2020
Midwest Derecho
Caused $7.5B in damage
in just 14 hours and
generated winds
up to 140 MPH
2019
The Rise of Social Inflation
The rising cost of insurance claims due
to the impact of societal factors such as:
> An increase in litigated claims and
larger jury awards
> Broader definitions of coverage by the
legal system, such as pandemic insurance
> Use of Public Adjustors in the
claims process
> Changing views of social responsibility
This all caused the losses from the 2017
and 2018 seasons to be much bigger
than anticipated.
2020
Rising Reinsurance Costs
Florida insurers seeing rate increases
of at least 20% and as high as 60%
As the insurance industry helps the world recover from disasters, the cost of insurance has changed. 2017 2018 2019 2020 2021 2022
2018
California Wildfires
2020
Active Catastrophe Season
> Most active storm season on record
> Cost estimated to be over$30B for Hurricanes Isaias,
Laura and Sally alone 4
COVID-19
Global Pandemic
> Bigger losses than 9/11
> Uncertainty around full impact
to the industry and the world
8/17/2017
Hurricane Harvey2
> 2nd costliest storm
on record ($125B)
> Dumped approximately
29 trillion gallons of water on
Texas and Louisiana
2020
Very Low Interest Rates
Very difficult to earn the investment
return many carriers are dependent on,
causing reduced risk appetite
2021
Another Active
Catastrophe Season
with the second most disasters
in a calendar year, behind 20205
> Winter storm event in
the deep south
> Extreme heat, drought and
wildfires across western U.S.
> Hurricane Ida
2020
California Wildfires
2020
Colorado Wildfires
2017 Hurricane Season Ranks
as Costliest Ever for U.S.
Harvey The ‘Most Significant Tropical
Cyclone Rainfall Event’ in U.S. History
2020 Atlantic Hurricane Season
Breaks All-time Record while
Leaving the Gulf Coast Battered
2018
Hurricane
Florence
Western
Wildfires
2017
Hurricane
Irma
2017
Hurricane
Harvey 2017
Hurricane
Maria
2018
Hurricane
Michael
2020
Windstorm
Derecho
2020
Hurricane
Laura
2020
Hurricane
Sally2020-2021
Colorado
Wildfires
2017-2022 Natural Disaster Locations
2018
2020
2019
2017
2020
Global Insurance
Market Starts
to Harden
10/17/2018
Hurricane Michael
> Category 5
> 9th most costly storm on record ($25B)3
Hurricane Michael is the Most
Powerful Storm to Hit the
Florida Panhandle on Record
2018
Market Starts to Harden Due to Catastrophes
The market begins to harden and capacity
constricts causing supply and demand
issues for insurers
2016 is the height of a soft market.
Buyers and producers are happy, prices are low and
companies compete to pay producers commission.
2022
2022
2022
2022
2022
Western Drought
and Heatwaves
2022
Hurricane
Ian
2021
Hurricane
Ida
Aftermath of Hurricane Ian,
Fort Meyers, FL
$
2022 we are in a hard market.
There is high demand for insurance coverage and low appetite to insure. Rates are high and coverage is difficult to find. 2022
Rising Costs
Due to inflation, social inflation,
undervaluation, and a lack of
insurance capacity, creating
a hard market.
9/2022
Hurricane Ian
> Category 4
> Estimated to exceed $50B in
insured and uninsured losses 5
$
2020-2022
COVID-19
2019-2022
Hardening
Markets
Nationwide
(and worldwide)
TIMELINE KEY